M&B planned takeover reportedly scrapped

LONDON (Reuters) - Private equity firms Cinven CINV.UL and Apax Partners APAX.UL have scrapped takeover plans for pub group Mitchells & Butlers (MAB.L) (M&B) after facing financial hurdles, the Telegraph reported on Sunday.

The private equity firms were finding it "extremely difficult to make the maths work", the paper said, citing a person close to the situation.

M&B's growing pension deficit, which in March 2007 was valued at 250 million pounds with liabilities of 1.5 billion pounds, were among the hurdles facing potential bidders, the paper reported.

Neither Cinven nor Apax could be reached for comment. Officials at M&B were not immediately available for comment.

A source familiar with the matter told Reuters last week that pub rival Punch Taverns (PUB.L) was the most likely suitor to make an offer. M&B is also considering whether to go ahead with its own restructuring plan, the source added.

M&B chief executive Tim Clarke and outgoing chairman Roger Carr have been giving presentations to potential bidders, including the buyout firms and Punch, which made a paper-based takeover proposal last month, the paper added.

With household bills rising, a smoking ban now well established, and gloomy predictions about the state of the economy, British pubgoers are feeling the pinch and pub firms have been reporting falling sales.

Harvester, O'Neills and All Bar One owner M&B put itself up for sale in January after losing 400 million pounds on a failed attempt to spin off its properties in August.

(Reporting by Hsu Chuang Khoo and Mathieu Robbins, Editing by Rory Channing)