A CONSORTIUM led by two retailers raised the stakes in the battle for convenience store business Londis.

Lancelot, set up by former directors of corner shop chain T&S Stores, said it had raised its offer for Londis in a bid that would value the group at £63m.

Lancelot is challenging a 100 per cent bid for Londis by Budgens owner Musgrave, which would give £31,000 to each of the shopkeepers who own the wholesaling and retailing business.

Under the terms of its bid, which replaces a previous £60m proposal, Lancelot would buy a 40 per cent minority interest in Londis for £25.2m.

The store owners would retain a 60 per cent majority controlling interest through new Londis shares.

Lancelot is led by Geoff Purdy and David Crellin, who were employed by T&S Stores before its acquisition by supermarket group Tesco. The bid has financial backing from Icelandic bank Kaupthing.