Glasgow nightclub boss in swoop for famed city pubs
Key parts of the Festival Group business are expected to be sold by owner Kenny Waugh as he breaks up his loss-making leisure empire.
He is due to announce the sale of a number of venues to Glasgow nightclub owner Stefan King in a deal worth around 30 million.
Among those expected to go are the Three Sisters in Cowgate, Biddy Mulligans in Grassmarket, the Bank Hotel on the Royal Mile and the Murrayfield Hotel.
It is Mr Waugh's second sale in a week, after he offloaded his chain of 65 Scotbet bookmakers to its management and two gambling industry veterans.
It has not been revealed how much that sale raised.
It is thought that Mr Waugh will keep part of the Festival Group, which will be renamed Waugh Taverns. His other interests include the Raeburn Hotel and Hudson chain.
Stefan King already owns a number of venues in Edinburgh, including Bennets, near the King's Theatre, the Ghillie Dhu in Rutland Place, the Granary in Leith and GHQ in Picardy Place.
A spokesman for his GI Group said: "It is true that we are currently in negotiation with Kenny Waugh to join forces. Negotiations are ongoing and it would be wrong to go beyond that in relation to particular units and impact on personnel."
In Glasgow, Mr King owns the venues Arta and the Corinthian in the Merchant City.
Best known for his interests in pubs, clubs and cinemas in the city, there has also been speculation that he had entered into talks with the Royal Bank of Scotland over the acquisition of the former BBC Scotland HQ in the West End.
But he is now thought to be less keen on the idea after meeting resistance from local residents over a previous attempt to open a nightclub in the nearby Botanic Gardens.
Mr Waugh has not commented on the reported deal over the Edinburgh venues.
The tycoon, who is the son of the former Hibs chairman of the same name, has been looking to cut Festival Group's mounting losses for some time.
The group's last-filed accounts, which run to the end of July 2009, revealed that the group owed 46.2m to Clydesdale Bank. Its pre-tax losses had risen from 6m to 11.4m.
He was in talks with the new owners of Scotbet for 12 months before the sale, which has seen former Tote chief executive and gambling consultant John Heaton installed as executive chairman.
Graham Martin, formerly chairman of Probability Games Corporation, has become chief executive.