A buyout firm is expected to open a new front in the bidding war for Morrisons, two months after the supermarket rejected its first offer.
Clayton, Dubilier & Rice has until Friday to beat the £6.7 billion proposal from Majestic Wines owner Fortress.
It must raise its original 230p-a-share offer by at least a fifth to ward off its private equity rival.
Fortress raised its bid from 252p to 272p earlier this month in a pre-emptive strike against gatecrashers.
The move may also have appeased sceptical shareholders, many of whom signalled they would not support a deal under 270p.
It is thought that Clayton, Dubilier & Rice will have to offer at least 275p, though industry experts believe a 280p offer would be more meaningful.
Some have suggested that the buyout firms seeking to outdo each other could see Morrisons’ share price hit 290p.
Clayton, Dubilier & Rice originally had until August 9 to improve its bid under City takeover rules, until the deadline was extended by 11 days.
Sources told The Times that the Morrisons board and Takeover Panel would not have given the extra time without being confident of an improved offer.
In turn, the shareholder vote on Fortress’ proposal, due to take place today, has been shunted back to August 27.
In addition to its 272p bid, Fortress has pledged to maintain jobs and pensions, along with intending not to sell off Morrisons’ properties.
Clayton, Dubilier & Rice will be under pressure to make similar assurances to secure a recommendation from the Big 4 grocer’s board.
Even if the offer does not rise from its current level, analysts believe that the private equity firms cannot make an acceptable return without substantial asset sales.
Morrisons owns around 85 per cent of its freeholds, which are believed to be worth up to £9 billion.