By Marc Jones

LONDON (Reuters) - Harvester and O'Neill's pubs and restaurants owner Mitchells & Butlers (MAB.L: Quote, Profile, Research) said it hoped to use private equity cash to buy the managed pubs arm of Punch Taverns (PUB.L: Quote, Profile, Research), turning the tables on its one-time suitor.

Punch originally put forward plans to merge the two in February, shortly after Mitchells & Butlers (M&B) put itself up for sale when it lost nearly 400 million pounds ($790 million) on a failed 4.5 billion-pound property deal.

After a closer look at M&B, and under pressure from shareholders, Punch pulled the proposals last month but hinted it would come back in a tie-up deal with other would-be buyers.

Sources close to M&B's strategic review have said CVC and Blackstone (BX.N: Quote, Profile, Research) have offered to take a joint stake of 29.9 percent in M&B while Permira [PERM.UL] and Bain Capital, owner of caterer Brake Bros, were also mulling taking stakes.

M&B said on Monday a number of private equity firms had offered to take a stake in it at a "material premium" to the share price, adding it could use the cash to pay Punch.

"One form of funding being considered is the basis on which the private equity investors, who support Mitchells & Butlers' strategy of consolidation, might invest in the company," M&B said in a statement.

Punch said it was also in talks with private equity firms.

"Punch has been exploring options with third parties in relation to M&B, including a deal involving Spirit ... Punch continues with these discussions," it said in a statement.