PUB group Laurel is considering a possible £3bn offer for the All Bar One, O'Neills and Harvester estate set to be demerged by Six Continents.

Laurel, which was created in May 2001 when Whitbread sold 3,000 pubs to Morgan Grenfell for £1.62bn, confirmed it was working with investment bank Rothschild about a bid approach.

It faces tough competition because Six Continents has already said that a number of venture capital backers are interested in the Mitchells & Butlers arm - due to get its own listing in the middle of next month.

Six Continents has already rejected a £2.8bn approach from a venture capital firm which it emerged had come from BC Partners.

BC said it remained interested in making an offer despite being told last week that its initial proposal was "insufficiently attractive".

Mitchells & Butlers is the new name for the group's retail division and includes an estate of more than 2,000 pubs and restaurants.

The demerger will leave Six Continents with a hotels arm that includes its Holiday Inn, Inter-Continental and Crowne Plaza chains.

Laurel now operates 625 managed pubs and bars, including traditional locals and metropolitan bars around the UK, after selling 2,300 pubs to Enterprise Inns. Brands include Hogshead, Wayside, Champion and Tavern Venue.