Robert Tchenguiz and Apax, the private equity group, are believed to be at loggerheads over whether to sell Somerfield, the supermarket chain, which is up for auction but has attracted only one bid.

Sources close to the process say that Mr Tchenguiz, the property tycoon, is keen to press ahead with the disposal because he is sitting on millions of pounds of losses from soured bets on J Sainsbury and Mitchells & Butlers.

Apax, which jointly owns the group alongside Barclays Capital, is prepared to put the sale on hold if it does not achieve a decent price for the group's 955 stores.

Price expectations are split, with Somerfield believed to be holding out for bids in the range of £2 billion to £2.5 billion. Bidders have said that the group is clinging to pre-credit crunch valuations and needs to lower its sights.

“The price is coming down, but they don't seem to have figured that out yet,” one source said yesterday.

Only one suitor, the Co-op, submitted a proposal for the entire chain by the deadline of March 15 and it is believed not to come close to Somerfield's valuation.

A string of other retailers, including Marks & Spencer, Waitrose, Wm Morrison and J Sainsbury, initially expressed an interest but did not submit any proposals.

Asda, the supermarket chain owned by Wal-Mart, of the United States, started the sale interest with an initial approach to Somerfield's owners. It failed to table an offer by the deadline.

Asda is understood to be interested only in Somerfield's larger stores and it may try to strike an agreement with the Co-op if the latter is successful.

With only one bid on the table, the process is in danger of grinding to a halt.

The Co-op is, in theory, the frontrunner, but sources said yesterday that the group was “in the dark” about the next stage of the process.

It is believed that the Co-op has its financing lined up, although a spokesman declined to comment on any details.

Sources close to Somerfield denied a rift and said that the Co-op had not met the asking price.

The mutually owned Co-op runs more than 2,200 convenience stores and supermarkets across the UK, generating more than £4 billion of revenue.

Peter Marks, its chief executive, considered a bid for Somerfield three years ago when he was in charge of United Co-operatives, which is now part of the wider Co-op group.

Apax, Barclays Capital and Mr Tchenguiz bought Somerfield in 2005 for £1.1 billion.

Any decision to pull the sale would be risky because an exit via an initial public offering is also extremely unlikely amid the turmoil in the credit markets and a lack of investor appetite for flotations.

It is believed that the owners have wrung all the costs they can from the business and, although it is performing well, there is a chance that the market could deteriorate if the economic slowdown deepens and starts to hit the food retailers.

“There's no more costs to come out and these guys have got to get their returns,” another source said yesterday. “The longer they wait, the less likely Asda and others are to want to put their money to work.”

Somerfield hired Citigroup to run the auction in January. A day after the news broke, Paul Mason, the Somerfield chief executive, said that the group had enjoyed an “exceptional” Christmas, with like-for-like sales up 6.7 per cent in the three weeks to January 5.

However, the supermarket's share of the grocery market has remained relatively static at just under 4 per cent. It posted pre-tax profits of £26.4 million for the year to April 28, against a loss of £118.1 million the year before.

Neither Somerfield nor Mr Tchenguiz was available to comment last night.

Somerfield shelf life

— More than 1,000 stores nationwide

— Approximately 50,000 staff

— 12 million customer visits every week

— About 4,000 own-label products

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