West Midlands-based Mitchells & Butler, owner of O’Neill’s and All Bar One, looks set to open its books to potential bidders this week.

M&B, which is worth around £1.8 billion, effectively hoisted the for sale signs when it announced a strategic review at the end of January after losing £274 million in a failed property venture. M&B said last week that its chairman Roger Carr would step down when he had completed the review, and would be replaced by former Dairy Crest chief executive Drummond Hall.

Rival pub group, Staffordshire-based punch Taverns, has already proposed a merger between the two companies, creating a £3.7 billion business, while it is believed private equity firms KKR and Cinven are considering an approach, along with Blackstone and CVC.

At least three prospective bidders – who are said to have signed confidentiality agreements with M&B – will also try to win over entrepreneur Robert Tchenquiz, who is M&B’s largest shareholder with a 23 per cent stake.

The sell-off is likely to be sealed before M&B’s announces its interim results in May.

If the Punch plan emerges as the winner, the tie-up would involve more than 10,500 sites – but could also mean job losses in the Midlands.

M&B employs around 1,000 people at its headquarters in Fleet Street, Birmingham, and around 43,000 full and part-time workers at its 2,000 outlets.

Punch employs 675 at its Burton on Trent head office as well as some 22,000 staff at its 9,000 pubs. Under the merger proposals both Punch and M&B shareholders would each own 50 per cent of the new company, with M&B shareholders also receiving a cash payment of £175 million.

When it announced the proposed merger last month Punch described the cost-saving logic behind the deal as “compelling.” The boss of the new business would be current Punch chairman Giles Thorley, with M&B chief executive Tim Clarke as chairman.