Convenience store group BWG has made a €35 million bid for rival Londis.The bid follows a series of contacts over the past year between the two franchise operators and, if successful, will create a group with around 10 per cent share of the Irish grocery retail market.

BWG, which owns the SPAR and Mace franchises in the Republic, would not comment last night on the deal but Londis acknowledged a bid had been made.

"An offer has been received by ADM Londis from BWG and that offer is being considered by the ADM Londis board," a spokeswoman said.

The Londis board met last night but has given no indication of its likely response to the approach. It is understood a further board meeting will be held in the next few days.

Any takeover of Londis would signal a period of consolidation within the Irish retail sector, which has recently been addressing the challenge posed by the arrival of discount retailers Aldi and Lidl.

Given the size of the rival Spar and Londis chains, it is likely that an offer would be vetted by the Competition Authority before it could proceed. However, a combined group would still fall well short of the size of the Musgrave/Centra/SuperValu organisation.

The latest move by BWG is thought to be its third approach to its rival in the past 12 months. The two sides held preliminary talks last October but these failed to progress.

At the time, ADM Londis was said to be looking for offers of more than €30 million before it would consider its position.

An approach earlier in the year also failed to amount to anything, while an approach from Musgrave in 2002 was rejected.

Margins in the Irish convenience retail sector have been falling slightly but a study last year by Tansey Webster Stewart showed that gross margins remained above 20 per cent while profits were rising.

The move for the Londis chain in Ireland comes as its British namesake, is the subject of a €55 million plus takeover wrangle in which another Irish player, Musgrave, is involved.

Sales at Londis's 300 stores rose 14 per cent last year to more than €500 million, making it the fastest growing of Ireland's symbol groups. Londis, which employs 4,500 staff around the country, intends to open a further 30 stores this year.

BWG has been restructuring its operations since a €220 million management buyout from Pernod Ricard. It sold its Northern Ireland business J&J Haslett, which operates the Mace franchise north of the Border, to management at the end of last year.

At the time of that announcement, BWG chief executive Mr Leo Crawford said the money raised in its asset disposal programme - calculated at around €130 million - would help reduce group debt.

He said then that BWG was now in a position to look at restructuring its debt in 2004. However, he also signalled that the disposal of non-core assets did not mean it would rule out expansion by acquisition if the right opportunity arose.

BWG's Spar operation runs 400 stores, employing 7,500 people, with plans to expand this by 20 per cent by the end of next year. Last year, Spar recorded sales of around €850 million, a rise of 12 per cent on 2002.

The group also operates the Mace franchise in Leinster and Munster, a Spar network in south-west England and a British drinks wholesaler and franchise group

Tesco is currently the market leader with a 24 per cent stake, followed by Dunnes Stores, Musgrave, Superquinn, Spar and Lidl.