THE tycoon Robert Tchenguiz is in secret talks with pub giant Mitchells & Butlers to strike a £4 billion property deal.

Tchenguiz is one of the pub group’s biggest investors and has mounted a long campaign to force the company to release capital tied up in its property estate and return it to investors.

M&B, which owns the All Bar One and Harvester pub chains and Browns restaurants, has been secretly sounding out a handful of potential buyers for its estimated £5.5 billion property portfolio in the past couple of weeks.

Tchenguiz, who is also one of the biggest investors in J Sains-bury, is in delicate negotiations to buy and then lease back hundreds of M&B’s managed pubs and restaurants. If successful it would be one of the largest transactions of its kind in Britain.

M&B’s advisers have offered a variety of different-sized property packages to potential buyers. The smallest portfolio on offer is worth about £500m while the largest is valued at more than £4 billion, and represents the lion’s share of the company’s pub estate.

M&B will deliver half-year financial results this Tuesday. It is unlikely a transaction will be tied up by then, but chief executive Tim Clarke will come under pressure to outline his plans for the company’s property portfolio.

Any deal is expected to be structured as a joint venture with the company. A financing package lined up by M&B’s bankers is also likely to be offered as part of any deal.

Tchenguiz, who owns about 15% of M&B’s shares, has offered to buy the largest package of property, but he is not the only party to have held talks with the pub group. Other potential candidates for sale-and-leaseback deals could include Topland, a private property company, or a big investment bank.

The deal would be similar to the joint ventures that Tesco, the grocery chain, has struck with property investors.

In a research note published last month, Michael Cox, a structured-finance analyst at Royal Bank of Scotland, wrote that a joint venture would allow M&B to “retain some control and upside potential” from the properties while still enabling it to “demonstrate what a third-party investor would be willing to pay for the assets”.

If Tchenguiz does win the battle to buy M&B’s pub estate it would represent a remarkable turnround in his relationship with the company, which soured after it rejected a 550p-a-share takeover bid from him a year ago.

Tchenguiz has been campaigning for M&B to spin off its property portfolio into a tax-efficient real-estate investment trust, a move that is expected to be rejected by Clarke at the results presentation.

Tchenguiz has already benefited from M&B’s soaring share price – which has climbed by more than 20% this year, closing on Friday at 867½p.

Since M&B was demerged from Six Continents in 2003 it has returned more than £2 billion to investors. Its market capi-talisation has risen from £1.6 billion to £3.7 billion and its share price has gone up by four times.

Clarke is expected to return a large slice of the £4 billion it will raise from the proposed deal with the Tchenguiz consor-tium. But it could take several months to complete and other parties are also interested.

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