Six Continents accused Mr Osmond's Capital Management and Investment (CMI) of trying to buy it "on the cheap".

Last week Mr Osmond said he was considering a multi-billion pound offer for the group, as long as the company's planned demerger did not go ahead.

Meanwhile, the Hilton Group has confirmed it is also considering a bid for Six Continents.

Share surge

Reports suggest Hilton's possible all-share merger deal could be worth �8bn.

Six Continents shares gained 8p to 633p on the speculation but Hilton shares were down 4.75p at 159p.

This would be the absolute worst time for change of control with the company Jay Fishman, Six Continents' owners association

Six Continents owns a raft of pub and restaurant chains - including All Bar One, O'Neills and Harvester - as well as a vast hotel portfolio whose brands include Holiday Inn, Intercontinental and Crowne Plaza.

Last October the group said it was planning to split itself into two separately listed companies.

War of words

Mr Osmond said last week that Six Continents' demerger plan was misguided, and accused the embattled company of delivering "unacceptably low returns" for shareholders.

But Six Continents hit back, suggesting Mr Osmond's plans were "fundamentally flawed".

And on Monday, Six Continents continued its attack by saying it believed CMI had "timed its approach ahead of the demerger so that it can acquire Six Continents on the cheap".

"The hotels industry is at a cyclical low point. With the threat of conflict in the Middle East, this is not the time to make wholesale disposals of hotel assets."

Chief executive Tim Clarke said: "We are pursuing a clear plan to deliver shareholder value and the demerger represents the next step in this process."

Franchisee fears

Six Continents' franchisees, who own and manage the majority of the 3,300 hotels in the company's global portfolio, are concerned about the effect on service levels of a hostile takeover.

Jay Fishman, chairman of the board of Six Continents' owners association, said: "We believe this would be the absolute worst time for change of control with the company.

"We are in the weakest business environment in the history of the modern hotel industry."

The association is worried said it believes many of its members would pull out of the Six Continents system in the event of a takeover.

The business, which opened its first Holiday Inn in 1952, provides franchise with financial and marketing support, staff training, and access to a centralised booking system.