Rival brewers were lining up bids of £4 billion-plus for Mitchells & Butlers (M&B) last night, prompted by the All Bar One operator’s disastrous failed hedge on a property venture.

M&B, which said on Tuesday that a hedge transaction on an aborted property deal had cost it £391 million, revealed that it had been approached by several interested parties.

Punch Taverns is understood to have expressed interest in all or parts of the business. Greene King, Marston’s and private equity firms are also thought to be eyeing the M&B estate.

M&B shares surged 67p, or 17 per cent, after the release of a statement detailing potential bid interest minutes before the close of trading. The closing price of 468p valued the group at £1.9 billion, or £4.4 billion including its £2.5 billion debt. In the statement, M&B said that a “number of parties . . . have . . . made preliminary and tentative expressions of interest.” The company added that no formal discussions had taken place.

Two years ago, the pub and restaurant operator rejected a written 550p-a-share approach from Robert Tchenguiz, the property entrepreneur and owner of a 22 per cent stake in M&B.

At the time, the group, whose brands also include Harvester, said that the bid undervalued the business and its prospects. It received backing for its stance from several institutional shareholders.

In a trading statement this week, M&B revealed a rise of just 0.7 per cent in like-for-like sales in the first 17 weeks of its financial year.

Although analysts regard the group’s trading performance as relatively robust, it is, like its rivals, battling against factors including the smoking ban, rising costs and the uncertain economic environment.

Analysts said that Punch – which first considered an approach to M&B late last year – could enjoy synergies of at least £50 million from a tie-up with M&B. However, they believe that today’s uncertain financial climate could force the group to tie up with another company to clinch a deal.

The £391 million hedging write-down came after an aborted property venture with Mr Tchenguiz. The deal, which had been designed to return £1 billion to shareholders, collapsed, but hedges taken out as insurance against the financing have only just been closed – triggering the £391 million pretax cost.

The deal would have involved the injection of 1,300 of M&B’s 2,000 outlets into the joint venture. Mr Tchenguiz’s investment vehicle, R20, would have bought a 50 per cent stake.

The disaster led to the downfall of Karim Naffah, the finance director, and shareholders at M&B’s annual meeting today are expected to question why Tim Clarke, the chief executive, and Roger Carr, the chairman, are staying on. Industry sources said that Mr Clarke’s knowledge of the business could prove vital in helping to ensure a successful outcome to a sale.

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