Sainsbury eyes TM Group

NOT wanting to be left out of all the takeover activity, Sainsbury is trying to buy TM Group, owner of the Martins and Forbuoys corner shop chains.

The supermarkets group is the favourite to win the auction. It is bidding against the Co-op.

TM, which is owned by Montagu Private Equity and Electra Partners, owns 1,200 shops. It is likely to fetch over £200m. A spokesman said: 'A sale process is under way.'

The deal is small fry for Sainsbury, but all major food retailers have been turning their attentions to convenience stores because of the difficulty in getting planning permission for new space.

Market leader Tesco shrewdly agreed a £377m deal to buy T&S stores in 2002 and last week announced a deal to buy 45 small London stores.

Regulators are getting increasingly jittery about the dominance of the supermarket majors, so they have blocked all except Morrisons from buying Safeway.