Heineken and an investment partner are in advanced takeover talks with Punch Taverns. However, the Dutch brewing giant faces competition from a higher rival bid from one of the British pub company's founders, Alan McIntosh.
Patron Capital Advisers, working with Heineken, is in talks about a possible cash offer of 174 pence per share, Emerald Investment Partners, McIntosh's firm, put forward a possible cash offer at 185 pence per share. Emerald currently holds 2.2% of Punch's shares.
Heineken's offer values Punch's equity at about £386m while Emerald's offer would equate to a £410m valuation, according to Reuters.
The bidders have until 11 January to make a firm offer or walk away, according to UK takeover rules.
Punch now has around 3,500 pubs, and said that Heineken would acquire about 1,900 of its pubs from Patron immediately after a takeover, with Patron keeping more than 1,300 sites.
That would give Heineken a total of about 3,000 UK pubs, moving closer to market leader Enterprise Inns, which has nearly 4,500 sites.
Heineken has an existing portfolio of about 1,100 pubs, most bought from Royal Bank of Scotland in 2011.
A Punch acquisition would triple the number of Heineken pubs selling the Dutch group's beers, including Amstel, Sol and Lagunitas alongside Strongbow cider and its green-bottled Heineken lager.