Punch Taverns has refused to rule out teaming up with private equity groups to ensure its proposed merger with Mitchells & Butlers (M&B) goes ahead.
Press stories over the weekend suggested that Punch's management had held "secret talks" with private equity firms Blackstone and CVC over the proposals.
It was reported that Punch had offered the firms 10 per cent in the pubco in return for their financial help - said to be in the region of £200m - to help square away what would be a merger worth £4bn.
According to the reports the deal would involve the two private equity firms lending Punch cash in the form of a convertible loan, the value of which would be later converted into shares in Punch.
A Punch spokesman yesterday declined to comment on the reports, although another source described the situation as "fluid", suggesting that some form of 'behind-the-scenes' discussions are taking place.
An M&B spokeswoman also declined to comment.
Hamish Champ, City & Business editor says: "Despite Punch's coyness it is quite possible the pub operator has been talking to third parties with a view to nailing M&B. Neither Punch or private equity can guarantee sealing a deal on their own, and surrendering a five per cent stake in the group in return for hoovering up M&B has got to be a tempting prospect for Punch Taverns' Giles Thorley. Convincing existing shareholders might be trickier, however."