(Reuters) - Britain's Spirit Pub Co (>> Spirit Pub Co PLC) has rejected a takeover approach from cider maker C&C Group (>> C&C Group Plc), but said the Irish firm had until Nov. 20 to submit a formal offer.

Rival pub owner Greene King Plc (>> Greene King plc) is already in talks to take over Spirit in a cash-and-stock deal valued at 723 million pounds. Spirit has a market capitalisation of 702 million pounds.

C&C, which produces cider under the Magners and Bulmers brands said on Friday that it hoped to use Spirit's network of 1,200 pubs to improve its access to English drinkers, but that there was no certainty it would make a firm offer.

The tie-up would allow it to "match the recognition it enjoys in its other core markets" Scotland and Ireland, C&C said. It would also provide cost synergies and improve its access to capital.

C&C shares were down 7.4 percent at 10:00 a.m. BST.

Goodbody analyst Liam Igoe said the fall in C&C's share price appeared to indicate investor scepticism about the value of the deal for the Irish firm. "The market was surprised by this announcement and has difficulty understanding where there are sufficient synergies to make this deal work," he said.

Spirit confirmed in a statement on Thursday that it had rejected C&C's proposal, but it did not disclose the details. The Times newspaper reported that C&C was offering 115 pence per share in cash and stock, with at least a third in cash.

This would top Greene King's offer of 109.5 pence per share, comprising 8 pence in cash and 0.1322 Greene King shares for every Spirit share.

Peel Hunt analyst Nick Batram described the C&C bid as "leftfield" but said it had increased the likelihood that Spirit would be sold.

"Some might dismiss C&C's gate-crashing as opportunistic but it is such a differentiated strategy that we wouldn't rule out a higher offer," Hunt wrote in a note to clients.

Spirit's shares were up 1.4 percent, while Greene King's stock was down 1 percent.

(Additional reporting by Abhiram Nandakumar in Bangalore; Editing by Maju Samuel and Pravin Char)

Stocks treated in this article : C&C Group Plc, Spirit Pub Co PLC, Greene King plc