Cobra Beer, the Indian-themed lager brand, is prepared to split its UK and Indian businesses and sell them to separate buyers as its founder, Lord Bilimoria, seeks $274m for the group.

Lord Bilimoria, who owns almost two-thirds of Cobra, is selling the brand after Diageo showed interest in it during the summer. Talks with Diageo over the distiller taking a minority share fell apart, prompting Cobra to consider other buyers.

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Lord Bilimoria said: "We are proactively now approaching all the major drinks companies in the world."

Cobra will this week distribute information memorandums to trade and financial buyers stressing they can either bid for the full business, or for its UK and Indian arms separately. It will consider both cash and equity offers.

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Analysts say SABMiller could be a buyer for the whole business, given its strength in India (where it owns the Foster's brand and is the country's second biggest brewer) and strategy of developing international premium brands. Diageo declined to comment on whether it would look again at Cobra.

Cobra has brewed beer in India, which contributes about one third of total sales volumes, since 2005 from nine breweries. It has a 1 per cent share of the Indian beer market.

Cobra Beer looks for buyers

A potential Indian buyer could be the UB Group, which owns Kingfisher, India's biggest beer brand. The group, run by billionaire businessman Vijay Mallya, is also in talks with Diageo over the sale of a stake in its United Spirits [Get Quote] business.

Cobra built its British business in Indian restaurants but has diversified into sales through supermarkets and pubs. Restaurants today account for about 40 per cent of sales, with one-third derived from supermarkets.

Molson Coors might be interested in the UK business but analysts say other brewers, such as Heineken, Carlsberg and Anheuser-Busch InBev, are tied up integrating acquisitions.

Lord Bilimoria said he would like to keep a small stake in Cobra if possible. "Ideally I'd love to be able to carry on with a role in the business and keep a small share." He owns 64 per cent of Cobra. The remainder is held by the Och-Ziff investment group, employees and other investors.

Group net sales for the year ending in July were pound 33.6m, with some pound 28m from the UK (where it contracts out brewing and does not own any breweries) and the remainder from India. Cobra is not profitable.

Copyright The Financial Times Limited 2008