THE Last Chance Saloon bidding war for supermarket chain Safeway was looking decidedly overcrowded last night as US buyout specialists Kohlberg Kravis Roberts weighed in.

The arrival of the New York venture capitalists has spiced up the fight for the 479-store group.

KKR is one of the best known buyout firms in the world, rising to fame during the merger mania that dominated Wall Street in the 1980s.

The group was immortalised by the 1991 bestseller Barbarians At The Gate documenting its $31bn acquisition of cigarette and snackfood giant Nabisco two years earlier.

Authors Bryan Burrough and John Heylar said founder Henry Kravis had "a war chest greater than the gross national products of Pakistan or Greece, his clout rivalling that of any in financial history".

Whether that buying power is still as strong is debatable but rival bidders Morrisons, Sainsbury and Asda will know they have a fight on their hands from outside the sector.

Some analysts were predicting yesterday that it is only a matter of time before other venture capitalists ask to pick over Safeway's books with a view to a potential bid.

Cinven, of the UK, was one finance firm rumoured to be considering a bid but said it was not interested at present. It refused to rule itself out at a later date.

Safeway is seen as the lame member of the supermarket herd and is believed to be the last opportunity any of the major players will have of making a significant impact on an extremely competitive market place.

City brokers were unsurprised that a fourth player was joining the fray after investment bank Credit Suisse First Boston (CSFB) resigned on Thursday as Safeway's joint broker, citing a "potential conflict of interest".

CSFB yesterday acknowledged it was now working for KKR on the possible bid.

The bidding process looks certain to drag on for months as competition authorities scrutinise the battle.

Anthony Platts, of the North-East's largest stockbroking firm Wise Speke, said: "If KKR were winners in a bidding situation they would presumably break up the chain and sell off individual stores.

"Whatever happens, the more bidders there are, the longer this scenario will go on. Safeway shareholders will not see an eventual winner for some time so they will not see the cash from the buyout either."

Safeway shares fell 2p yesterday to 305p, while Sainsbury's price was up 7.5p at 247p. Morrisons rose 4.25p at 182.25p.