City bookmaker Financial Spreads has installed BHS tycoon Philip Green as second favourite in the race to win supermarket group Safeway.

Latest odds

Wal-Mart 7/4 Philip Green 2/1 Sainsbury 7/2 KKR 7/2 Morrisons 8/1

But the US thoroughbred Wal-Mart still heads the betting at 7/4.

Early favourite Sainsbury has drifted out to 7/2 with Kohlberg Kravis Roberts (KKR), while the Northern challenger Morrisons is bringing up the rear at 8/1.

But with the situation changing quickly smarter punters may be staying out of the market until a clear favourite emerges.

'Open race'

Freddy Tulloch, of Financial Spreads, said: "We have had a lot of people expressing an interest but not much money has gone down yet.

"It is such an open race. We are all just waiting for the next development."

Richard Ratner, retail analyst at Seymour Pierce, said he still believed Wal-Mart would win the battle for Safeway.

Shares up

But he added: "I think Philip Green's view is that he won't be referred to the competition authorities while others will.

"And if there's any blue sky between himself and Wal-Mart's bid, it may be that fund managers will go for something that is certain rather than waiting six months for a deal that could be stopped by the Competition Commission."

He added: "I can't believe he will spend any money on fees and go ahead without believing he has a good chance of succeeding."

Safeway's shares were up 4% in morning trading, a rise of 12.75p to 317.75p, valuing the group at �3.35bn ($5.38bn).

In a short statement to the City, the group said it noted Mr Green's interest and would "make further announcements as and when appropriate".