Mitchells & Butlers: the new S&N?

After M&B last week admitted to losing hundreds of millions of pounds in a hedge gone wrong (the most I ever lost in a hedge was a football), the group's subsequent announcement that it had received bid interest didn't come as a huge shock - although irritatingly it did arrive after my City pages went to press!

While occasionally the subject of takeover speculation in recent years, M&B's future - at least as far as who owns it - is as uncertain now as it's ever been since it demerged from Six Continents back in 2003. Which is ironic, since historically it has been acknowledged as one of the best pub operators in the country.

Still, being historically good at something isn't enough of a defence if things start to get a bit shaky, and following the hedge debacle potential bidders smell a takeover opportunity like a lioness hones in on a wildebeest whose migrating efforts are being hampered by a gammy leg.

But even here, things don't go according to plan. The stock market euphoria that followed Wednesday night's bid admission levelled off pretty quickly. After a half decent flurry on Thursday, Friday's 450.5p close was barely a tad more than half what M&B shares were worth last May, when talk of the moolah-making property joint venture with Robert Tchenguiz had the investment community slobbering like a rabid shitzu.

Nevertheless there is the sense that M&B might be embarking on a similar journey, especially coming so soon after the recent Scottish & Newcastle/Carlsberg/Heineken saga.

The fly in this particular jar of ointment is how a potential bidder might fund a deal in today's market.

There are those who will tell you that for the right acquisition, the right terms and the right borrower the banks will come up with the goods. We shall see.

I guess for those determined enough, particularly those with a track record of doing big deals recently and running managed pubs to boot, anything is possible.

Over to you Giles…