Shares in Mitchells & Butlers (M&B) fell 41.5p to 706.5p, a drop of over 5.5%, during early morning trading yesterday after questions were raised over whether its delayed £4.5bn property joint venture with Robert Tchenguiz would eventually happen. The company announced yesterday that the proposed transaction had been delayed due to the current disruption in the debt markets. It said: “The board believes that it is now not possible to execute the joint venture due to the current disruption of the debt markets which has resulted in a significant widening of credit spreads.” The company also said it had spent £60m to set up a number of hedging positions to protect the planned joint venture against future interest rate rises. It is thought that the deal may now be delayed until September at the earliest or more likely until next year, if it goes ahead at all. Douglas Jack, of Panmure Gordon, has claimed the proposed deal had left M&B “in a mess”. Jack said: “What is meant by saying that the deal is unlikely to be concluded until ‘the debt markets have improved?’. “Does this mean ‘until interest rates fall to advantageous levels’. If so, the deal is in trouble because interest rates and bond yields are still increasing.” Simon French an analyst at Numis Securities, said "We have questioned on many occasions the wisdom of adding £240m of incremental rent when like-for-like sales have slowed to their lowest in four years and today’s news on the weakness of the debt markets and implications for the joint venture serve only to highlight this. “We believe this update damages the credibility of all parties involved and we do not expect there to be a near-term solution." The announcement by M&B also impacted on the share prices of a number of its rivals. Shares in Greene King, which announced last month that it was planning to enter a similar joint venture agreement to help it unlock property value from part of its estate, fell 28p to 952.5p in early trading. Marston’s saw its shares drop 13.25p to 368p, while shares in Punch Taverns were down 22p to 1094p.

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