Asda owner TDR Capital is among the potential bidders circling Costa Coffee after Coca-Cola placed the UK’s largest café chain on the block.

The private equity firm, which also owns pub giant Stonegate and the UK arm of Popeyes, is exploring an offer as Coca-Cola works with advisers at Lazard on a sale. Any deal is expected to value Costa at around £2bn — almost half the £3.9bn the soft drinks group paid in 2018.

Coca-Cola bought the business to gain a foothold in the coffee market but has struggled to grow the chain amid rising costs, intense competition and weaker sales.

The group recently admitted the brand had “not quite delivered” on its investment case, reporting a 3% fall in coffee sales in its latest results, driven mainly by Costa’s performance in the UK.

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In recent years the chain has faced pressure from rivals including Gail’s, McDonald’s and Greggs. NIQ data shows sales of its canned and bottled coffee drinks fell by almost 25% last year, while the chain has also been hit by higher staffing costs.

TDR previously considered a bid for Costa in 2018 when Whitbread sold the business to Coca-Cola. The firm is now understood to be among a small pool of suitors, alongside US private equity giant Apollo Global Management, with reports also linking Chinese investor Citic to the process.

Insiders said Coca-Cola may look to retain a minority stake in Costa as part of any transaction.

TDR has been active across UK consumer markets, with holdings including Asda, David Lloyd gyms and Stonegate pubs. A Costa acquisition would further expand its portfolio of high-street brands.