Punch Taverns will be unable to scupper Morgan Grenfell Private Equity's £1.6bn (€2.6bn) purchase of Whitbread's taverns in the law courts, according to an adviser close to the deal.

Punch Taverns chief Hugh Osmond was hoping that a non-compete agreement his company signed with BT Capital Partners, the US private equity fund, would stop BT Capital's sister company, Morgan Grenfell, from buying Whitbread's pubs. These hopes have now been dashed, according to an adviser close to the bidding process.