A handful of supermarkets and venture capitalists are believed to be in talks about the future of Martins and Forbuoys chain TM Retail, put on the market by its financial backers in January.
All options are still being considered, including strategic partnership, disposing of the chain as a single entity, breaking it up, selling it piecemeal or refinancing it through a secondary buyout.
It is understood the talks are still at an early stage, and a couple of offers have been rejected so far. A price tag for the group, which operates 323 c-stores, 137 variety stores, and 776 CTN stores under five fascias, is £220m-£250m.
HSBC Ventures which has a 33% share, and Electra Partners, which owns 27%, appointed Goldman Sachs to sell TM Retail after Tesco's acquisition of T&S. They said they wanted to capitalise on the interest in the sector, and cash in an investment they have held since 1995, an unusually long period for venture capital investment. TM Retail's management holds a 34% stake in TM's holding company Thistledove.
TM announced a strategic partnership with Somerfield in February and plans to open six trial Somerfield with Martin's' fascia by July or August.
The first store, in Cheadle Hulme, Greater Manchester, opened in March.
A second pilot site ­ a 2,743 sq ft store in Great Sutton, Cheshire, is due to open on May 21 and that will be followed by a 2,685 sq ft store in Holmes Chapel in Cheshire, in June, and a 1,925 sq ft store in Parbold, Lancashire, a month later.
Somerfield business development director Keith Jackson said Cheadle Hulme was "exceeding expectations" and Somerfield and TM Retail "remain extremely excited by the opportunity to develop this proposition still further".

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