Private equity boss Jon Moulton has described the proposed property deal last summer between Mitchells & Butlers (M&B) and investor Robert Tchenguiz as the kind of deal that only makes sense “at the peak of the bubble”, writes Paul Charity. The deal was aborted when banks refused to lend money as the credit crunch began. M&B went on to lose almost £400m pre-tax on interest rate and inflation swaps before it closed its position at the start of this year. The losses prompted the resignation of finance director Karim Naffah and led to chief executive Tim Clarke offering his. Jon Moulton, who runs Alchemy Partners, said: “It made sense right at the peak of the bubble — it just about worked. But they missed the peak of the bubble and of course extraordinary errors were made thereafter. “The ability to lose money and derivatives had never been previously a characteristic of the pub industry. If you’re in the (asset value) bubble and you are the last man to sell the thing on the up you did very well. And that was basically the hope. “Mr Tchenguiz has made a lot of money and lost a lot of money by playing with very large amounts of debt and taking very big positions — he is a gambler. He took a gamble and this particular one did not work.” Moulton says he is unsure what he would have done had he found himself in the position of M&B management — hedge positions in place but no deal. “I’m not sure whether I would have bothered closing down the hedge or done the honourable thing and shot myself. “It was just such a daft position to have got into and you have two choices; either run in and hope for the best or close it — neither of which were attractive. “They opted to run and hoped for the best.”