The battle to take over Morrisons will be decided in a one-day auction on Saturday, the supermarket has announced, as two US private equity firms compete for the UK’s fourth biggest grocery chain.

Fortress and Clayton, Dubilier & Rice (CD&R) must submit formal bids, with the auction process on Saturday running for a maximum of five rounds.

A result will be announced by Monday morning, although the process could also be scrapped if either side states they will not increase their current offers. If neither company makes an increased offer, then CD&R’s latest bid will win. CD&R’s bid valued Morrisons at £7bn, or £9.7bn including debt.

It will bring to an end a takeover saga that has dragged on since CD&R, which is being advised by the former Tesco chief executive Sir Terry Leahy, first made an approach for the Bradford-based grocer in June.

After the June bid, the rival Softbank-backed Fortress made an offer of £6.5bn in July. However, shareholders felt this was too low and Fortress, which owns Majestic Wines, returned a month later with an increased offer of £6.7bn in August, which the board accepted.

Later that month, CD&R returned with its £7bn bid, leading to the board withdrawing their support for the Fortress bid and throwing its weight behind the higher offer, after several top investors expressed concerns about the preliminary bids.

The Morrisons auction comes amid a flurry of bids for UK companies from private equity investors, particularly from the US, amid concerns that British businesses may be undervalued relative to their international peers. Targets have ranged from rival the supermarket Asda to a series of aerospace and defence manufacturers including Ultra Electronics and Meggitt.

The takeovers have caused concerns over the sell-off of important British assets. Morrisons played an important part in feeding the country during the coronavirus pandemic, relying on assets including its own food manufacturing facilities, farms and even a fishing fleet.

William Woods, an analyst at AllianceBernstein, an investment bank, has calculated that Morrisons’ new owners may have to sell assets worth more than £1.5bn in order to make the returns expected by private equity investors.

Both potential buyers have been keen to stress they want to uphold the supermarket’s values and have attempted to ward off suggestions they will start selling off the company’s property freeholds.

Supermarkets typically lease properties, while Morrisons continues to own about 90% of its estate.

There have also been concerns that any new owner may reduce the supermarket’s tax bill, with offshore shell companies set up before the takeover.

Morrisons’ pension trustees will have to be consulted, although earlier this month they said an agreement had been reached with CD&R.

The Takeover Panel said: “On the basis that neither offerer has declared its offer final, such that either offer may be increased or otherwise revised, a competitive situation continues to exist.”

Both sides have agreed all bids will be at a fixed cash price and cannot include stakes in other businesses or dividends to shareholders. If both sides are still bidding by the final round, Fortress must make its bid-per-share with an even number of pence and CD&R with an odd number, to avoid the bids being the same.

The results will be published by Monday morning at the latest. However, if either side makes a “no increase” statement before the end of the week, the auction will be cancelled.