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Icelandic investment group Baugur has joined a group including property entrepreneur Robert Tchenguiz that is seeking to buy the Somerfield supermarket chain, according to the Financial Times.

The decision ends Baugur’s efforts to launch its own bid and makes it less likely that there will be an auction for Somerfield, owner of Britain’s fifth biggest supermarket group, which includes Kwik Save, the paper said. It appears to make the consortium the front-runner for Somerfield, although property groups London Regional and Topland are considering bids.

In February, Somerfield rejected Baugur’s proposed £1.03bn (US$1.95bn) offer but the Icelandic group continued to pursue Somerfield. Last month, the Barclays-Apax-Tchenguiz consortium proposed an offer of 205p a share, valuing Somerfield’s equity at £1.12bn. It is understood that the enlarged consortium is continuing negotiations at this level.

It is understood that Baugur is prepared to sell its stake in Iceland, the supermarket group that is Britain’s seventh biggest food retailer, should the Somerfield deal go ahead, the paper said.

Gavin Rothwell, analyst at Verdict Research, said Baugur’s decision might keep down the price: “This appears to be something of an all star line-up and I think it puts them in pole position. It also reduces the chances of a bidding war, which is possibly bad news for Somerfield shareholders.”