Birmingham-based pubs group Mitchells & Butlers is considering selling a minority stake in its business to private equity firms to try to generate cash to shore up its balance sheet.
The All Bar One and O'Neill's pubs operator has become a takeover target after making a disastrous £274 million loss on transactions relating to a property deal it was forced to abandon last year.
Reports yesterday suggested that firms such as CVC and Blackstone may be interested in acquiring a share of the business.
The suitors are reportedly looking at providing a loan which would convert into a stake in M&B, which is also the owner of restaurant chains including Harvester, Toby Carvery and Ember Inns.
M&B, which has not commented on the speculation, is currently carrying out a wider review of the business, which could see it merge with Burton-upon-Trent's Punch Taverns, the UK's biggest pubs group.
Punch said last month there was "substantial strategic rationale" in combining the two businesses to create a company with more than 10,500 sites.
M&B's current woes have stemmed from a debt-financed property joint venture it planned with entrepreneur and major investor Robert Tchenguiz. The deal involved approximately 1,300 of its pubs.
There were also claims yesterday that M&B rival Whitbread is discussing the possible merger of its Premier Inn motel chain with competitor Travelodge.
The two chains would create a group with around 800 hotels Travelodge is owned by Middle East investment company Dubai International Capital, the group which was in talks over buying a stake in Premiership football club Liverpool until last week.
Under the proposed deal, Whitbread would buy Travelodge from DIC, which would gain a stake in the FTSE 100 Index-listed company in return, reports said.
A recent trading update showed Premier's like-for-like sales increasing at almost double the rate of the overall business in the year to February.
Whitbread has long eyed a tie-up with Travelodge and reportedly attempted to buy it when previous owner, private equity group Permira, put the chain up for sale two years ago.
Although a merger of the two business could raise competition concerns, the companies are expected to argue that a combination would still represent a small share of the overall market.