Iceland founder Malcolm Walker has arranged £150m of backing from a Canadian pension fund to enable a bid for the frozen foods chain.

Walker has reportedly signed a deal with Alberta Investment Management Corp to finance a £1bn takeover, The Sunday Times reported.

Walker said: “If I can buy the business with my management team, I will do that at the right price. If not, we’ll sell our shares and move on.”

Walker said the idea of working with private equity firms and not independently was “just too difficult” to contemplate despite receiving multiple offers from potential partners in the bid.

Second round bids for Iceland are due tomorrow with private equity groups BC Partners and Bain Capital thought to be Walker’s only serious contenders.

The investment committee of BC Partners has approved its offer while Morrisons is losing interest due to the large size of the 750-store estate, the Financial Times reports.

Walker, who with management owns 23% of the group, is not expected to submit a bid ahead of tomorrow’s deadline and will have 42 days to match any offer accepted by the resolution committee.

Farmfoods is expected to come in for stores if Morrison does bid after it had previously talked to Asda.