WARSAW/PRAGUE: Tesco, Britain's biggest retailer, is not the leading contender for Polish retail chain Zabka, put on the block by private equity firm Penta Investments, several sources told Reuters on Wednesday.

The people close to the discussions dismissed a report by Polish business tabloid Puls Biznesu that the British group was close to snagging the Polish chain to boost its position in central and eastern Europe.

"A private equity fund is a much more likely buyer," one of the sources said, but did not elaborate.

Another source said Penta could pick a winner in the coming days for the 2,350 Zabka convenience stores in Poland, estimated to be worth about $560 million.

Tesco already paid some 1 billion Czech crowns ($55.9 million) for Penta Zabka business in the Czech Republic in December.

Earlier this month, Czech magazine Euro reported that Penta was close to selling the Polish stores, known for their green frog logo, to private equity group BC Partners.

Tesco, BC Partners and Penta declined to comment.

Jozef Janov, managing director at Penta, said: "Negotiations are still ongoing, and we will not comment." ($1=17.88 Czech Crown)