The diversified Australian conglomerate Wesfarmers has said it is considering raising the scrip part of its A$19.7bn (US$16.7bn) offer for the Coles retail group, Reuters has reported.

With the auction for Coles entering its final week, Wesfarmers said it was looking at ways it might increase the scrip component above the previously stated 25%. It has been suggested that the stock element in the offer would be attractive to Coles' large retail shareholder base because it is more tax-efficient.

"We know how important and attractive the option will be to a lot of Coles shareholders," a Wesfarmers spokesperson was quoted as saying. However, the company said it had not made any decision regarding the scrip element.

The deadline for binding bids, set by Coles, is 09.00 local time (23.00GMT) this Saturday (30 June).

Wesfarmers is currently the front-runner in the race for the retailer, not least because it is able to offer shares as part of the purchase package and because it is not expected to fall foul of competition authorities. It already owns a 12.8% voting stake in the company, which it acquired in April.

The way looked to have cleared for Wesfarmers last week when it was reported that a rival bid led by private equity firm Texas Pacific Group (TPG) was on the brink of foundering. A source close to the negotiations had reportedly stated that the TPG consortium was close to withdrawing after talks with Woolworths over a joint bid had broken down.