M&B caps loss for failed property deal

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Further news that M&B's largest shareholder and would-be property joint venture partner, Robert Tchenguiz, had raised his stake in the company and that Christmas like-for-like sales were positive also helped lift the company's stock price.

Shares in the owner of the Harvester and O'Neill's pub chains, which fell from 900 pence last July to a 2-1/2 year low at 325 pence last week, were 3.9 percent higher at 396.75 pence by 9:00 a.m.

Quantifying its loss cements M&B as another high-profile casualty of the global credit crisis that brought mortgage bank Northern Rock to its knees.

Last August, M&B was days away from separating up to 2,000 of its pubs into a joint venture with Tchenguiz when the swift onset of the global credit crisis scuppered the plan.

M&B had been so certain the deal would proceed that ahead of the expected completion it entered into interest rate swaps and other financial derivatives or hedges aimed at protecting it from moves in interest rates and inflation.

Tchenguiz entered into similar deals, M&B said. Tchenguiz could not immediately be reached for comment.

The company said that with "no near-term prospect of debt markets permitting a property-based transaction" it had fully unwound those hedges at a loss. Finance Director Karim Naffah resigned and Chief Executive Tim Clarke offered to go but was asked to stay on.

M&B, which had already booked a 155 million pounds charge in its 2006/07 year, said it would take a further 119 million pounds post-tax exceptional loss in its current year.

None of M&B's seven executive directors, including Naffah, will receive a bonus for 2007. Deputy Finance Director Jeremy Townsend has been promoted to finance director.

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