Co-op lines up buyers for more Somerfield stores

LONDON (Reuters) - The Co-operative Group said on Thursday it had found buyers for 24 stores as part of the regulatory approval process for its purchase of rival food retailer Somerfield.

The consumer affairs watchdog has ruled that the Co-op, the country's biggest mutual retailer, should sell 133 stores to ease competition concerns following its agreement to buy Somerfield for 1.57 billion pounds in July.

Of this total, the Office of Fair Trading (OFT) was concerned the Co-op might struggle to find buyers for 24 stores and so asked it to line up purchasers prior to backing the deal.

On Thursday, the Co-Op said it had agreed to sell 7 of the 24 stores to Ireland's Musgrave, owner of Budgens stores.

Six each will go to supermarket group Tesco (TSCO.L) and privately-owned Spar, four to grocer Wm Morrison (MRW.L) and one to privately-owned German discounter Lidl.

A spokeswoman declined to say how much the stores would be sold for.

The four stores being sold to Morrison are part of the 38 which the British grocer said earlier on Thursday it had agreed to buy from the Co-op for 223 million pounds.

The OFT said it would consult interested parties on the Co-op's plans.

(Reporting by Mark Potter; editing by Simon Jessop)