The private equity firms Blackstone Group and CVC Capital Partners are understood to have made a joint proposal to Mitchells & Butlers (M&B) to buy a stake of up to 29.9 per cent in the pub and restaurant operator.

The move follows a similar offer from the rival buyout firm Permira, while a third potential investor, Bain Capital, is understood to be considering entering the fray with a comparable proposal to take a significant minority stake.

Such a move would provide the All Bar One and Sizzling Pub Co operator with the firepower to drive ambitious expansion plans and help it to move on from the difficulties of the past few months. M&B, which has not commented on the proposals, is expected to press both Permira and Blackstone/CVC to improve their offers, which are believed to have been pitched at a small premium to the share price, while continuing to canvass other offers.

One analyst said that the tone of yesterday’s trading update from M&B, which shows resilient first-half figures in the face of a tough consumer spending environment, was “clearly designed to persuade suitors to sharpen their pencils”.

The purchase of a minority stake in M&B, which has a market value of about £1.3 billion, would probably bring with it boardroom representation and a say in strategy. Part of any stake purchase could take the form of convertible securities.

In its information memorandum for suitors, M&B outlines a number of possible corporate transactions, including a “combination” of its Hollywood Bowl chain with the Tenpin operation owned by Georgica to create a business with 63 bowling centres.

The memorandum also moots a sale of Alex, M&B’s German restaurant chain, further disposals of pubs with redevelopment potential, and swapping its lodges for further large pubs — an idea it is understood to have discussed with Whitbread.

It also mentions “consolidation opportunities”, and there are suggestions that, with firepower from a private equity investor, M&B could even seek to turn the tables on Punch Taverns and offer to buy Spirit Group, its rival’s managed pub division.

Punch was the first company to approach M&B after it appointed Citigroup to handle a strategic review at the end of January. Punch later withdrew its merger proposal, which included a £175 million cash sweetener, while reserving the right to return with an alternative plan.

M&B began the strategic review after being forced to take a £391 million hit from the closure of a hedging facility. It had taken out the interest and inflation rate hedge to secure finance for an aborted £4.5 billion property venture with Robert Tchenguiz’s R20 investment vehicle. The loss cost Karim Naffah, the finance director, his job.

In a trading update covering the 27 weeks to April 5, M&B said that it had managed to achieve “resilient sales growth and robust operating profits performance”.

Like-for-like sales increased by 0.6 per cent, with declining beer sales being offset by strong growth in food, which accounts for 38 per cent of turnover.

Excluding refurbished outlets, like-for-like sales fell by 1.1 per cent, with its residential division 1.5 per cent lower and its high street bars up 0.2 per cent. M&B said that positive action on costs, purchasing and staff productivity had mitigated the impact of rising costs and food inflation.

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