Delta Two is considering seeking informal guidance from the Office of Fair Trading (OFT) on whether its £10.6 billion plan to bid for J Sainsbury would lead to a regulatory inquiry.

The Qatari-backed fund’s advisers are preparing to meet the supermarket to try to thrash out a deal this week.

The Sainsbury’s board is asking Delta Two to raise the level of equity within its offer by at least £500 million before it will open the company’s books for due diligence. It argues that otherwise the deal could become embroiled in an inquiry into whether the supermarket’s increased debt levels would make it less competitive.

Delta Two is understood to be unconvinced by Sainsbury’s arguments and is considering calling its bluff by seeking OFT guidance directly.

The state-backed fund, which already owns 25 per cent of Sainsbury’s, is thought to be unwilling to raise the level of equity above the £4.6 billion proposed and is expected to put up a fight by comparing its finance structure with other deals, such as Kohlberg Kravis Roberts’ takeover of Alliance Boots, the chemist.

However, Delta remains under pressure to put up some additional cash to gain the board’s backing and help to secure its debt finance.

The two sides are scheduled to meet today or tomorrow for talks, but have been wrangling for nearly six weeks already over the equity issue, as well as over the rules of due diligence, Delta’s plans for Sainsbury’s pension fund deficit and the need for acceptance from investors holding 75 per cent of the supermarket’s stock. Sainsbury’s board is thought to be keen to recommend Delta’s 600p-a-share bid, but is said to be concerned about regulatory issues and the views of the founding family, who control 18 per cent of the stock.

Family members are concerned about the level of debt in Delta’s bid and have hinted that the company is worth more than 600p a share.

The board is thought to be prepared to recommend an offer without the backing of the family, but there is a strong risk that a takeover bid could fail without its support. Pressure from independent shareholders, such as Robert Tchenguiz, the entrepreneur who controls a 10 per cent stake, is likely to have increased since Sainsbury’s shares fell 9 per cent to 544½p in the past month on fears that a deal will not be struck. A tightening in the debt markets has also increased fears that Delta will not be able to raise the finance its needs to table a firm offer.

If Delta Two’s bid collapses, the supermarket will be left in the hands of three powerful investors with potentially conflicting plans for it.

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