Shares in Carphone Warehouse have fallen on reports that the owner of Phones 4u has made a rival bid on its merger with Dixon’s Retail.
Private equity firm BC Partners is said to be considering a bid which could undermine the proposed £4bn tie-up, according to City sources.
Carphone Warehouse and Dixons told the market they needed more time to decide on a potential deal.
They now have until 5pm on 19 May to make a decision after extending the deadline under UK takeover rules, but a bid by Phones 4u could see the deal fail.
Carphone Warehouse shares fell 5% yesterday on the rumours to 323p, while Dixons shares picked up, after spending the early part of yesterday in the red.
Phones 4u operates over 160 stores in Dixons Retail's Currys and PC World megastores.
A Phones 4u spokeswoman said: 'We are not commenting on any speculation around this story at present.'
Sources close to the company said that due to the existing commercial relations between the two companies, they talked on a regular basis.