Pubmaster has dismissed as "nonsense" a report that rival Punch Pub Company is negotiating to buy a 22 per cent stake in the business.
However, sources close to Punch told The Publican that the company is in the market for acquisitions and refused to rule a move for Pubmaster out.
News agency Reuters reported that German state bank WestLB was in "advanced talks" to sell its stake in Pubmaster to Punch. Earlier in September, Punch was reported to have made a tentative approach directly to its rival.
A Pubmaster spokesman dismissed the report, saying: "The story is complete nonsense."
He stressed that, since Pubmaster is a privately held business, West LB could not sell its stake without the agreement of other shareholders. The German bank is aiming to sell off the assets of its UK-based Private Finance Group, headed by financier Robin Saunders, over the next two to three years.
The Pubmaster spokesman indicated that when the time came, Pubmaster would almost certainly want to acquire the stake itself.
A combined Punch and Pubmaster would have a leased and tenanted estate approaching 8,000 pubs.
A source close to Punch said that the company, which is in the process of raising £250m to grow the business, "has said that it plans to grow by acquisition".
The source added that there are a number of possible acquisition targets, and Punch "does not want to be put in the position of saying 'yes or no' to each one".
Punch chief executive Giles Thorley told The Publican last month that if Pubmaster was for sale "we would obviously consider it".
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Punch makes takeover 'approach' to Pubmaster (8 September 2003)