Laurel Pubs' offer could value Six Continents estate at £3.4bn

Laurel Pub Company is in the midst of formalising a multi-billion pound bid for the pubs arm of Six Continent before the business is demerged and listed on the stock market in two weeks' time.

"We are seriously looking at the Six Continents' estate and we are being advised by the investment bank, NM Rothchild, on the matter," a spokeswoman for Laurel said yesterday. "We are very interested, as the business has a very nice strategic fit with our existing estate."

The new offer comes after Six Continents last week dismissed £2.8bn in cash for its Mitchells & Butlers business, which operates more than 2,000 pubs and restaurants including the All Bar One and Harvester chains. The company's board said the offer was too cheap.

The Laurel offer is thought likely to be in excess of £3bn, although some analysts have valued the business at up to £3.4bn.

Six Continent's bid committee is understood to be extremely unwilling, however, to sell the business, and any bid prior to the listing is likely to be rejected.

The company has been under siege since it announced plans to float Michells & Butlers and list it and its InterContinental hotel chain as separate companies. It saw off a £3.9bn hostile bid from the entrepreneur Hugh Osmond earlier this month when shareholders voted overwhelmingly to back the management's plans to spin off the pubs arm.

It is thought the £2.8bn proposal came from the private equity firm BC Partners although other venture capital firms have also expressed an interest in the business.

Laurel was formed two years ago from the sell-off of 3,000 Whitbread pubs to Morgan Grenfell Private Equity. Its chief executive, Ian Payne, used to run the pubs estate for Bass, as Six Continents was formerly known, and will know the businesses well.