Asda is mulling a bid for frozen food specialist Iceland.

The Walmart-owned supermarket has appointed Lazard to help it assemble an offer for the chain, according to The Sunday Times.

The plan reinforces Walmart’s ambition to grow its overseas business as its domestic sales remain flat. The retailer entered the UK through its £6.7bn Asda acquisition in 1999. It stepped up its grocery market share last year through its £770m takeover of Netto.

Collapsed Icelandic bank Landsbanki is selling its 67% stake in Iceland as part of the winding up process of the bank, as revealed by Retail Week.

The 750-store retailer business is thought to be valued at £1.2bn to £1.6bn.

Rival grocer Morrisons is also interested in buying the frozen food retailer and is thought to be on the verge of appointing advisers to lead its bid. 

Iceland founder and chief executive Malcolm Walker is keen to buy the retailer and told Retail Week last month that he will do all he can to keep it “an independent, autonomous business under the current management”.