Waitrose and The Co-operative Group have teamed up to launch a joint bid for the Somerfield grocery chain, The Grocer has learnt.

The two retailers will go head-to-head with Asda - currently the favourite to buy the retailer - and four or five other offers, expected to come in by Wednesday (6 February), the deadline for lodging first-round bids.

If the combined offer is successful, it is likely The Co-operative Group would pocket Somerfield's smaller stores, while Waitrose would take on its larger outlets to add to its 187-store portfolio.

Somerfield has a portfolio of 908 stores, 90% of which are under 15,000 sq ft in size and 70% of which are under 10,000 sq ft. It also owns 149 stores in petrol stations.

The Co-operative Group, which merged last year with United Co-operatives to create the UK's fifth-largest grocer by turnover, is keen to expand, but is committed to focusing on convenience.

Waitrose, meanwhile, has already revealed plans to double its sales to £8bn in the next 10 years. It recently advertised in the property press for new sites between 10,000 and 21,000 sq ft - offering agents a £75,000 incentive if they found one.

But taking on Somerfield's larger outlets could help it achieve this target - or exceed it - far sooner.

Waitrose and The Co-operative Group also constitute a good fit culturally. Both make a big play of their ethical principles, with a major focus on fair trade with suppliers and animal welfare.

The Co-operative Group is owned by its 2.5 million members, most of whom shop with the retailer, while Waitrose is part of the John Lewis Group, which is owned by its 68,000 employees.

Other potential bidders for Somerfield, which had sales of £4.4bn in the year to 30 April 2007, include Sainsbury's and M&S. Morrisons has already ruled itself out, while a bid from Tesco could face competition barriers.

A private equity bid is thought unlikely with uncertainty in the financial markets running so high, which means the Somerfield fascia is likely to disappear.

Somerfield, which is being advised by Citigroup, is owned by a consortium made up of private equity groups Apax and Barclays Capital and property tycoon Robert Tchenguiz, who together bought the chain for £1.8bn in October 2005. Their asking price is believed to be between £2bn and £2.5bn.

Interest from so many parties increases the likelihood Somerfield's owners will realise a price near the upper end of expectations.

A spokesman for The Co-operative Group said: "It is no secret the group is looking to grow its business and as a consequence we are frequently linked to different retailers.

"Somerfield is a case in point. If an appropriate opportunity arose we may well look at the business."

Waitrose said: "We would be interested in acquiring the right sites from any potential vendor."

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