Mitchells & Butlers (M&B) is being lined up as the likely victor in a bidding war for Whitbread's non-core Beefeater and Brewers Fayre pubs.
While refusing to comment on whether it is in the "home straight" for the 235 outlets Whitbread is looking to dispose of, a spokesman for M&B said the group has made no secret of the fact that it believes its pub restaurant model means it can run the sites considerably more profitably than their current owners.
Whitbread announced in the spring that it was looking to offload those of its pubs that were not linked to its Premier Travel Lodge hotels, as it tried to turn around its disparate collection of leisure businesses.
M&B also refused to comment on reports that it had bid up to £550m for the portfolio, although a spokesman acknowledged the group was "an obvious candidate" for the pubs.
"This is not a 'must-do' deal," he said. "We can get growth from what we already have by converting existing sites to more profitable ventures. Earnings per share growth can come from means other than buying it," he added.
Reports suggest others interested in buying the sites include GI Partners, which recently bought more than 250 ex-Spirit pubs from Punch Taverns for £571m, as well as Wolverhampton & Dudley Breweries and private equity firm Alchemy Partners, which owns the Tattershall Castle Group.
"Having backed the group's rejection of R20's recent bid, M&B investors will want to see their faith repaid by evidence that it can deliver solid growth in the months and years to come. While asserting it doesn't need to buy growth - and stressing it will never overpay for assets - the group will be prepared to push the boat out on the Whitbread portfolio. The scale of the outlets fits M&B's existing large pub restaurant model to a tee, and even if it has to break its own rule re paying at the top end, it should be able to deliver significant returns from such a purchase."