Autogrill bids for Compass arm

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The prospect of Italian-style coffee and Continental cuisine on the motorway service stations of Britain has moved a step closer as Autogrill, the European food giant controlled by the Benetton family, emerged as a front-runner in the bidding war for Compass Group's retail food and drink arm.

Autogrill is believed to have offered about £1.3bn for Select Service Partner, owner of the Moto service station chain, to secure a place as the only trade buyer on a short list of six.

Observers say it could be best placed to win the auction, since it can achieve supply chain cost savings that will not be available to private equity bidders. However, it is not clear that the company has made the highest opening bid, and the auction, being conducted by Compass's adviser Citigroup, will stretch well into the New Year.

Analysts are already salivating at the prospect of a final price tag for SSP above the range of estimates of £900m to £1.3bn.

The business is being offloaded by Compass after the group slipped into financial crisis as a result of a string of profit warnings. It is also embroiled in an investigation into corrupt buying practices on UN catering contracts and is awaiting the appointment of a chief executive to replace Mike Bailey, who is leaving.

Autogrill, which is listed in Milan, has 534 service stations across Europe, mainly in Italy. SSP also includes Upper Crust, the railway station sandwich shops, and Harry Ramsden's, the fish and chip restaurant chain.