Asda looks set to join the race to take over troubled music and DVD retailer HMV.

The supermarket giant is understood to be in talks with administrators Deloitte over a potential bid for the company.

This means Asda could become embroiled in a hotly-contested bidding war with restructuring outfit Hilco, which bought the debt of HMV from the group's lenders, Lloyds and Royal Bank of Scotland, in January.

Hilco, which already owns HMV Canada, which it bought from the HMV group in 2011 for £2m, is believed to have paid substantially less than HMV's estimated £176m debt to acquire the business.

A source familiar with the matter confirmed that if a deal is imminent, it is expected to be announced within the next two weeks as HMV's quarterly rent payment is due by the end of March.

Asda - owned by US outfit Walmart - began trialling Disney zones at several of its superstores last year, and it is understood to be interested in introducing the HMV brand into its stores in a broadly similar way.

HMV collapsed in January after facing increasing competition from online music and DVD sales, and struggling with a large number of high street stores.

Since Deloitte was appointed, nearly 1,500 jobs have been lost at HMV and over 100 stores have either already shut down or earmarked for closure.

HMV now has around 100 stores in the UK including its flagship outlet in London's Oxford Street - opened by English composer Edward Elgar in 1921.

Neither Deloitte or Asda would comment.