In a statement, the grocer said: 'The board has decided to enter into discussions with the potential offerers with a view to establishing whether the proposals could - result in a formal offer at a price that could be recommended by the board.'
The retailer announced on March 24 that it had received overtures from an unnamed party. However, it is understood that three separate groups are interested in the grocer, including Baugur, which has already registered an interest, but was rebuffed in February.
The other two potential bidders are believed to be a group headed by property investor Robert Tchenguiz, and property company London & Regional, which is controlled by the Livingstone brothers.
Baugur is understood to have raised its potential offer price for the retailer to 205p a share, valuing Somerfield at£1.13 billion. However, the share price is currently trading at at least 5p more.
Somerfield stressed that no firm offer is yet on the table and that the discussions could still come to nothing.
Analysts are a little more optimistic that the talks will eventually result in an offer that the board can put to shareholders. Seymour Pierce analyst Rhys Williams noted that Somerfield is an attractive target for potential bidders because the convenience store sector is expected to grow at a faster rate than the supermarket sector as a whole.
He said: 'With most of the other convenience store operators having been snapped up by the large supermarket groups such as Sainsbury's or Tesco, or now in private hands, we believe that Somerfield is the last large chain available.'