There is fierce competition among bar operators

Thorium - a company formed by Yates' management team and private equity firm GI Partners - has offered 140 pence per share for Yates.

Yates chairman Mike Hennessy described the offer as an "attractive price".

News of the deal came as Yates - which operates the Yates and Ha!Ha! chains - unveiled annual pre-tax profits of �4.1m, down from �9.7m last year.

High streets have become overly populated with bars and night-clubs Mike Hennessy, Yates chairman

Pre-tax profits before exceptional items were �10.6m, up from �10m last year, while turnover was down 1.2% to �151.3m.

Like-for-like sales at the firm's Yates wine bars were down 3.9%, although sales at the refurbished 21st Century Yates were up 1.6%.

The Ha!Ha! chain saw like-for-like sales up by 3.2%.

"Much has been achieved at Yates in the last three years," said Mr Hennessey.

"However, during that same period high streets have become overly populated with bars and night-clubs and the sector is now intensely competitive.

"The independent directors therefore believe that the offer represents an attractive price for Yates shareholders."