Pub giant Greene King has confirmed it is planning a bid to buy rival firm Spirit Pub Company.
The announcement came after a report in the Financial Times this morning that Greene King has offered around 110 pence per share for Spirit, having had an earlier 100 pence per share bid rejected.
In a statement to the City regarding the speculation, Greene King said: "In light of recent speculation, the Board of Greene King confirms that it has approached the Board of Spirit in relation to a potential combination of the two companies."
The company has until 5pm on 21 October to announce a firm intention to make an offer for Spirit, or to announce that it does not intend to make an offer.
Spirit Pub Company has 770 managed pubs, including the Chef & Brewer, Taylor Walker and Fayre & Square brands, while Greene King has 1,000 managed pubs and around 900 tenanted and leased pubs.