Musgrave's €57 million bid for the Londis symbol group in Britain looked to be facing a fresh challenge yesterday after it emerged that a rival offer could be under consideration.

It was reported in the London Times that Nisa-Today's, the UK's largest convenience store buying group, was looking at a bid that would match Musgrave's offer but would be more acceptable to disgruntled small Londis shareholders.

The structure of the Musgrave deal would see four Londis directors sharing more than half of the sale proceeds, while almost 2,000 convenience store owners would each receive £10,000 sterling (€14,240).

The matter became particularly heated over the past few days when Musgrave's offer document outlined compensation payments of £7.1 million for the same four directors.

Some 250 of the smaller shareholders are reported to have established an action group to persuade fellow store-owners to reject the Musgrave offer at an extraordinary general meeting on December 30th.

The Londis board has already given its approval.

A spokeswoman for Nisa-Today's declined to comment on the Times story yesterday, but she confirmed that the company's board had established a sub-committee "to explore the opportunities that exist" in Londis.

She said the sub-committee was meeting yesterday. It is expected that the group's decision will be made public today or tomorrow.

One complicating factor in such a bid would be Musgrave's status as a Nisa member through its Budgens chain of convenience stores in Britain.

Musgrave said last week that it hoped to link Londis with Budgens if its bid was successful. The combined turnover of the two chains would be slightly more than €2 billion.

Musgrave was hopeful at that stage that a deal could be concluded in January.

Nisa, which was formed in 1977, is a substantial power in UK retailing. Its turnover stands at about £15 billion and it counts more than 475 members, including Budgens and Costcutter.

A spokesman for Musgrave said the company believed its offer for Londis was a good one, "both in terms of the money on the table and also in terms of what Musgrave will bring to independent shareholders".

He said the issue of compensation for Londis directors was an internal matter for that company.