US electrical giant Best Buy is rumoured to be sizing up a bid for UK rival Dixons.

Best Buy entered the UK marketplace in spring last year in a joint venture with Carphone Warehouse. Acquiring Dixons would entrench Best Buy’s position in the UK, as well as taking out its biggest competitor.

Dixons, which operates the Currys and PC World fascias, is expected to unveil a decline in profits in its full year results tomorrow.

Best Buy lost £62m in its first full year of operating in the UK. It is now evaluating the potential of the big box business.