BusinessCompany NewsKPMG advised M&B on hedge catastrophe

KPMG advised M&B on hedge catastrophe

Firm was involved in advice on plan that landed pub group with £274m hit

KPMG advised Mitchells & Butlers in its ill-fated hedging plan, it has
emerged.

Newspapers reported this morning that Citigroup, JC Rathbone Associates and
KPMG had all advised on the deal, which saw the pub group lose £274m in a
hedging plan that was supposed to offset the risks of a property deal, which
itself collapsed.

Finance director Karim Naffah has lost his job over the move.

One adviser was quoted in
The
Times
this morning saying that it had played no part in ‘curious advice’ to
keep open the hedges in a ‘vacuum where there was no deal’. The paper also said
KPMG had been a debt adviser on the deal.

The hedges were kept open even after the property deal fell apart, with the
losses widening during the credit crunch.

A spokesman for KPMG refused to comment on what had happened this morning and
what kind of advice it had given, saying only that it had been an adviser to M
&B.

Further Reading:

Read
The Times piece: M&B up for sale after £391m hit

Mitchells
& Butlers FD goes in hedging calamity

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