First-round bids for a majority stake in British grocer Iceland Foods are due around Wednesday with supermarket groups Wm Morrison and Wal-Mart's Asda likely to take part in it, sources said.

However, Morrisons and Asda may be interested only in a parcel of stores, which mean they might team up with other parties, the source added.

Morrison, Asda and Landsbanki, which along with fellow failed Icelandic bank Glitnir is selling a combined 77 per cent stake in Iceland Foods, declined to comment.

It was unclear whether Iceland Foods' founder and chief executive, Malcolm Walker, would be involved in the first round of bidding.

Walker, who along with other managers owns a 23 per cent stake, has a pre-emption right, which means he only has to match the highest bid to win the auction.

Another source said he had been talking to a number of parties about potentially teaming up with them but had not yet made a decision. The auction is being managed by UBS and Bank of America Merrill Lynch.-Reuters