Leading UK supermarket operator Tesco is understood to be in talks to sell its Dillons newsagent chain in a deal worth £20m (US$36.8m).

The Dillons chain includes 180 stores selling newspapers, tobacco and grocery items. The mooted buyer is private convenience store chain TM Retail.

Tesco acquired Dillons in autumn 2002 as part of its £357m acquisition of the T&S Stores neighbourhood store group, and has never seen it as core to its business.

TM Retail is already one of the country’s biggest newsagent operators, owning the Martin’s and Forbuoys chains.

In a related story, Tesco is reported to have signed a licensing deal with eDiets.com, the US Internet diet service. Tesco has paid £2m to acquire the UK and Ireland rights to eDiets.com’s technology.

Tesco is reported to be planning to expand the service to enable dieters to order products recommended in their personalised meal plan to their door.