London, April 17 - The Co-Operative Group, Britain's biggest mutual retailer, said on Thursday it was "very keen" on buying privately-owned rival Somerfield, but that talks were at an early stage.
"It would be a great strategic fit," Chief Executive Peter Marks told Reuters. "But it's still early days and we've got a lot of work to do."
Newspapers have cited The Co-Operative Group as the frontrunner to buy Somerfield from its owners, private equity groups Apax and Barclays Capital and property magnate Robert Tchenguiz, but have also said it has been reluctant to pay an asking price of around 2 billion pounds ($3.9 billion).
Marks said that like-for-like sales at the Co-Operative Group's food stores rose over 4 percent in the first-quarter of its new financial year and that sales at rebranded stores were on average rising 13 percent.