UK supermarket group J Sainsbury is reported to have scaled down its interest in convenience store chain TM Retail, which could result in the deal being called off.

Sainsbury has been in exclusive talks with TM’s owners, Montagu Private Finance and Electra Partners since February.

However, Sainsbury is now reported to have made an offer for only a small part of the 1,200-store chain, Reuters reported, citing industry sources.

TM, which operates the Martin’s, McColl’s and Forbuoys stores, is believed to have wanted a buyer for the whole chain and thinks Sainsbury’s offer undervalues its best stores.