The chief executive of Mitchells & Butlers admitted he would take a "good look" at Scottish & Newcastle's pubs estate as he unveiled plans to return up to £400m to shareholders this autumn.
Tim Clarke said he was "very carefully evaluating" the prospects of bidding for S&N's 1,450-strong pubs arm, worth up to £2.5bn. He is waiting for S&N, which announced the decision last month, to release the sales memorandum.
M&B, which was demerged from Six Continents last month, said it had made "rapid progress" with the review of its long-term financing options. It plans to raise about £1.7bn by selling bonds to investors secured against income from its pubs and restaurants.
Karim Naffah, the finance director, said the move, which follows a path blazed by Punch Taverns, would enable M&B to finance the business more cheaply and halve the cost of equity. Analysts said a securitisation - so-called because the bonds are secured against the group's assets and cash flow - could make it harder for someone to buy M&B. "Doing this may act as a poison pill," one analyst said.
Asked if this had spurred the company to pursue the refinancing, Mr Naffah said: "Any company that takes positive action to improve value for shareholders makes itself less prone to third parties finding more ways to add value." M&B, which owns about 2,100 mainly freehold sites, will announce more details of its plans in September.
The group, which owns the All Bar One, O'Neills and Ember Inn chains, said trading had improved slightly towards the end of its first half and into May. But like-for-like sales still fell in the eight weeks to 10 May. It said the "relative buoyancy" of the economy in the Midlands and the North had cushioned weakness in the South.
Mr Clarke admitted M&B's decision to boost sales by running promotional drinks offers came at "some trade off" to the group's margins. He said the discounting was "hardly aggressive" and followed price rises of 5 per cent last year.
The company reported a 7 per cent fall in interim pro-forma pre-tax profits to £93m for the 28 weeks to 12 April on turnover up 1 per cent at £793m. It said comparisons were adversely affected by the timing of the important Easter trading period.
Analysts have tipped M&B as a takeover target; it rejected a bid from BC Partners ahead of its separation from Six Continents.
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