The future of embattled managed pub operator Mitchells & Butlers (M&B) remains in doubt after rival Punch Taverns ruled itself out as a sole bidder but left the door open to launching a bid with other parties.
Tenanted pub giant Punch approached M&B in February with terms of a possible merger, after the latter incurred a £274m loss on the closure of a proposed joint-venture property hedge fund, which was a victim of the credit crunch.
The deal would have created, by a significant margin, the largest pub operator in the country, responsible for one in six pubs in the UK and with 10,500 sites under its aegis.
M&B's future could now be in the hands of private equity groups Blackstone and CVC, which are believed to be building a stake in the company. Punch said that it had been approached by a number of third parties with relation to forming a consortium for a takeover deal.
However, several City analysts believed that the management team at M&B were determined to avoid any such outcome and were sceptical that the situation would be resolved any time soon.
Mark Brumby, analyst at Blue Oar Securities, said: "It doesn't look as though anybody comes out of this smelling of roses."
He added: "A break-up bid for M&B remains a possibility but, if it involves Punch as part of a consortium, it will be on less favourable terms. And though M&B possibly should be taken over, the question remains: by whom?"
However, one analyst, who did not want to be named, believed that, having deflected a solo bid from Punch, the pub company would now be likely to retain its independence.
He said: "Private equity cannot afford to buy them because they cannot raise the money, and the only deal was with Punch. They are doing everything they can to remain independent."
By Christopher Walton
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