Punch denies £5bn approach for M&B

Punch Taverns has denied that it is in talks regarding a £5bn takeover of rival Mitchells & Butlers (M&B).

Media reports at the weekend suggested that Punch was in the early stages of considering making an offer for the operator of the All Bar One and Harvester chains, after being approached by M&B shareholders.

Some reports went as far as suggesting that Punch management had spoken to the shareholders common to both companies. However, in a statement Punch said: "Punch notes the current speculation regarding Mitchells & Butlers and confirms that it is not in discussions with M&B or any M&B shareholder regarding any offer or merger."

The reports had suggested that a cash and paper offer from Punch would value M&B at about 800p a share, well above its 641p closing price last Friday, and create a group of 11,000 pubs. One City analyst has claimed that the way in which the story emerged and affected M&B's share prices should be investigated.

Mark Brumby, of Blue Oar Securities, said: "Friday's sharp share price movement, the false market that will have been created if talks are not taking place, the considerable volume of stock traded in this false market, and what look like authoritative stories in the press regarding takeover approaches may mean that an investigation into who said what, when and to whom, may be necessary.

"Hopefully it doesn't sound too pompous to suggest that hints and tips are not acceptable when significant amounts of money are being made (and lost) on the back of them."

A second analyst told the Morning Advertiser: "There are various rumours going around on the motivation for this story. It looks as if something quite fishy has been going on."