Mitchells & Butlers (M&B), the pub operator, is expected to tell shareholders next week that talks about the sale of a stake of up to 29.9 per cent to private equity have been put on the back burner.

The All Bar One and Harvester operator has been in discussions for several weeks with Bain Capital, Permira and Blackstone/CVC Capital Partners over the sale of a stake at a material premium to the current share price.

All three private equity parties are still said to be interested in investing. However, they are understood to be unwilling to do so until M&B has identified a fresh acquisition target on which to spend the money after the collapse of talks over a possible purchase of Spirit Group, the managed pub division of Punch Taverns.

M&B, which had promised to reveal the outcome of its strategic review with its interim results on Tuesday, is expected to tell shareholders that it is now looking at a number of alternative options, including expansion of Hollywood Bowl, its tenpin bowling business. In presentations to potential investors, M&B has alluded to a possible combination of Hollywood Bowl with the Tenpin chain owned by Georgica to create a business with 63 bowling centres.

M&B is also expected to moot a sale of Alex, its German restaurant chain, further disposals of pubs with redevelopment potential – so-called golden bricks – and swapping accommodation inns for further large pubs, an idea that it is understood to have discussed with Whitbread.

However, the pub company, which is being advised by Citigroup, is also tipped to reiterate its interest in pursuing bigger consolidation opportunities, despite the collapse of discussions over Spirit, and the private equity firms to which it has been talking remain interested in backing such a move.

However, the failure of M&B to announce the sale of a minority slice of the company may upset some shareholders, who had hoped that such a move would boost its flagging share price. The private equity firms are understood to have been prepared to pay about 400p a share, compared with the current share price of 330p.

There have been suggestions that Tim Clarke, M&B’s chief executive, could be forced out, although sources close to the company say that he has no intention of resigning.

The biggest shareholder is Robert Tchenguiz, the property entrepreneur. Last year, M&B and Mr Tchenguiz’s R20 vehicle were days away from signing a £4.5 billion property joint venture when the credit crunch killed the transaction. The deal’s collapse left M&B with an unused hedging facility taken out to smooth the impact on the joint venture of interest rates and inflation. In January, it was forced to close out the hedge at a pretax cost of £391 million, precipitating the strategic review and the resignation of Karim Naffah as finance director.

Mr Clarke tendered his resignation at the same time as Mr Naffah, but it was rejected by the board. Roger Carr, the embattled chairman of M&B, has said that he will step down once the strategic review is completed.

M&B refused to comment last night.

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