Feb. 21--Starwood and Strategic Hotel Capital today emerged as front-runners to buy hotels from Six Continents, the group facing a hostile takeover bid from entrepreneur Hugh Osmond. 

Osmond's strategy, outlined yesterday, is to break up the hotels division and either sell it piecemeal or run it with hotel partners. 

Six Continents, which wants to press ahead with a demerger of its pubs and hotels divisions, has rejected already a number of approaches for its hotels prior to Osmond's offer. 

But the interest expressed by Starwood and Strategic, two of America's biggest operators, suggests his Capital Management and Investment group may be successful in its approaches to the hotel trade. 

Sources said he had been talking to a number of big operators but received a certain amount of scepticism over financing. 

But Laurence Geller, chief executive of Strategic, said: "If the company goes into play, we are naturally obviously very interested. Our prime focus would be the real estate -- all of it." 

Starwood, meanwhile, has opened early talks on buying one or more hotels, though it is not clear whether it is dealing with Osmond or directly with Six Continents with a view to doing a deal after the demerger. 

CMI will now start sounding out Six Continents' shareholders to come up with a suitable price. Key investors include Alliance Capital and Legal & General. 

Osmond is thought to have been rebuffed by Six Continents before this week's offer, when he made an approach in recent months in the name of his Sun Capital Partners investment company. 

Six Continents, whose pubs include All Bar One and O'Neills, is due to demerge in April and has a shareholder vote at an EGM scheduled for 12 March. 

Osmond's bid is thought to have come now as the group this week published financial details on the business not usually available. 

Richard North, due to head up the hotels division under the Six Continents demerger, has accused Osmond of trying to get ownership of the pubs division on the cheap. 

-----To see more of the Evening Standard, or to subscribe to the newspaper, go to http://www.thisislondon.co.uk 

UKpound preceding a numeral refers to the United Kingdom's pound sterling.

(c) 2003, Evening Standard, London. Distributed by Knight Ridder/Tribune Business News. HOT, SXC,