Bankers Merrill Lynch have been called in to conduct an auction of the Spirit Group after confirmation that talks had already been held with Punch Taverns.
There are fears that a deal may prove difficult to complete because of the complex nature of the 2,000-pub estate.
A debenture has costly break clauses and there are also onerous supply agreements to brewers, as well as a sale-and-leaseback on the best of its managed estate.
Spirit has been formed from a hotchpotch of various deals and some rivals claim that chief executive Karen Jones has struggled to make it work.
There are also thought to be some disagreements over strategy between private equity groups Texas Pacific, CVC, Blackstone and Merill Lynch.
Punch chief executive Giles Thorley will be reluctant to overpay and is likely to want to sell down the estate.
The Sunday Times 03/07/05 (Business) page 3.2
