Six Continents was created from Bass

The two parties met on Tuesday night to discuss the proposed takeover for the first time.

But both sides emerged unchanged in their views.

Six Continents, whose vast portfolio includes All Bar One pubs, Harvester restaurants and Holiday Inn hotels, said it still believed splitting itself into two separate companies was the best offer for shareholders.

Meanwhile Mr Osmond, founder of the Punch Taverns pub group, said he would continue to court the group and that his offer depended on a demerger not taking place.

Open road

Mr Osmond, who also helped develop the PizzaExpress restaurant chain, has said he is interested in buying Six Continents through his investment vehicle Capital Management and Investment (CMI).

Mr Osmond: The road remains open

He has harshly criticised the Six Continents management for destroying shareholder value and claimed: "The only thing you could borrow from Six Continents is a lesson in value destruction."

The entrepreneur is planning his bid along with Alan McIntosh, his fellow Punch founder.

And the talks impasse has not put him off.

"Whilst the road to co-operation remains barred, at least for the present, the road ahead remains open for us," said Mr Osmond on Wednesday.

No firm offer

Six Continents meanwhile criticised CMI for not putting a firm offer on the table.

"They were not prepared to table a proposal other than to suggest it would include CMI shares and might include cash."

Since the bid approach surfaced almost two weeks ago, Six Continents has said it could make an extra $35m of annual cost savings at its hotels group, and return more money to shareholders by refinancing its pub business.

Its demerger plans involve renaming its hotel business - which includes brands such as Holiday Inn, Intercontinental and Crowne Plaza - as the Intercontinental Hotels Group (IHG).

Its pubs business - which includes the All Bar One, O'Neill's and Harvester brands - would be called Mitchells and Butlers (M&B).

Under the original proposals, shareholders were expecting a �700m payout.

Since Mr Osmond's interest, Six Continents has said a refinancing of the M&B pubs business "could significantly increase the return of capital".