Birmingham-based pub operator Mitchells & Butlers (M&B) has confirmed it has entered talks to acquire rival pub group Orchid.

M&B, which is based in the city's Jewellery Quarter and runs chains such as Harvester, All Bar One and O'Neills, told the stock exchange today it had entered exclusive discussions regarding the potential acquisition of the majority of Orchid's estate.

"Discussions are ongoing and there can be no certainty that a transaction will be concluded. A further announcement will be made in due course as appropriate," the brief statement added.

M&B has been undergoing a concerted disposal plan over recent years to shed some of its wet-led pubs to focus on its food offeringt.

Last week, it announced it had agreed a new pension plan after identifying a £572 million deficit as half-year turnover surpassed the £1 billion mark.

A report in The Times suggest M&B would pay in the region of £250 million for up to 180 of Orchid's 220-strong estate.

Orchid Group, which owns the Great British Cavery chain among others, is headquartered in St Albans and has been owned by the real estate arm of Deutsche Bank since 2012 following a restructure which saw the exit of previous owner, private equity firm GI Partners.

In 2012, it posted sales of £178 million but a pre-tax loss of £12 million.