M&B's £140m property deal loss

Shares in Mitchells & Butlers (M&B) plunged nearly five per cent to 589p this morning as the group fought back at weekend press claims that it was to lose £200m following the postponement of its property joint venture deal with Robert Tchenguiz's R20.

Instead M&B said it expects to post a loss of £140m on its postponed property deal with Tchenguiz's company.

In a statement to the Stock Exchange, M&B said the £140m "does not represent a cash loss and compares with a post-tax deficit of £60m as at 31 July 2007, as reported on 2 August 2007 when the Board of Mitchells & Butlers concluded that the joint venture with R20 was unlikely to be achieved until debt markets have improved".

A spokeswoman for M&B said the loss was "an accounting figure, not a cash loss".

The group meanwhile remained "absolutely convinced" of the value of the R20 arrangement and that the board's view of the long term deal was that it was the right strategy to adopt.

The crisis in the debt markets triggered M&B's recent decision to postpone its proposed joint venture deal with R20, which it had hoped would unlock millions of pounds for shareholders through property sales.

In its statement M&B said it believed "that substantial value can be released to shareholders through the creation by Mitchells & Butlers of a dedicated property company structure and discussions are continuing with banks to implement a transaction on acceptable financing terms once the debt markets have stabilised".

M&B's shares were trading at 589p, down 30p.