Mitchells & Butlers signalled yesterday that it was open to offers after taking a £391 million hit from hedging an aborted £4.5 billion property venture with Robert Tchenguiz.

Sources said that Punch Taverns was interested in all or part of M&B’s pubs and restaurants although discussions had not taken place.

The huge cash hit – equivalent to nearly two years’ of profits – was caused by a disastrous bet on interest and inflation rates which M&B made to secure finance for the property deal. The loss has cost the job of Karim Naffah, the finance director, and triggered a “strategic review”. All bonuses for executive directors were also scrapped.

The bet was particularly bad for Mr Tchenguiz, who is suffering paper losses on investments in J Sainsbury’s and SCi Entertainment. Mr Tchenguiz owns 22 per cent of M&B and recently bought a 3 per cent stake.

Other shareholders, who are expected to question the board at tomorrow’s annual meeting, questioned whether Tim Clarke, the chief executive, and Roger Carr, the chairman, could survive. Mr Clarke, who previously insisted the loss was not a resignation matter, said yesterday that he had tendered his resignation but that it had been rejected by the board.

M&B, which owns the All Bar One and Harvester brands, said last year that it planned to place 1,500 pubs and restaurants in a 50-50 joint venture with Mr Tchenguiz’s R20 investment vehicle. The deal was designed to return £1 billion to shareholders.

When the credit crunch hit in July last year the deal fell apart but the hedges remained. Yesterday’s closing of the positions triggered a £391 million pretax cost, £274 million posttax, and will lead to a £119 million exceptional loss this year.

M&B claimed that it had kept open the hedges on the advice of its financial advisers, which include Citigroup, KPMG and Rathbones, because they believed that a deal could still be pulled off.

However, one adviser said that it had played no part in “curious advice” to keep open the hedges in a “vacuum where there was no deal”.

Analysts at BlueOar Securities described the loss as a “monumental, career-ending debacle of the first order” and said that it was “hard to see how anyone associated with this catastrophe can stay with the company”.

A bitter blow — How to spill £391m

— M&B forms a joint venture (JV) with Robbert Tchenguiz to release value from its property assets

— They approach banks about raising the funds needed for a sale and leaseback type deal

— Citigroup and RBS agree, but only if M&B takes out a hedge to protect them against default by the JV

— M&B sets up two hedges; one against inflation falling and the other against interest rates rising

— The credit crunch forces the JV to cancel the property deal as the banks withdraw funding

— M&B, advised by its banks, decides to keep the hedges open believing the deal might yet be possible

— Inflation rises, interest rates fall forcing M&B into a £391m loss on its wrong-way bets

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