Weetabix, the UK breakfast cereal maker, has abandoned plans to launch a junk bond after disgruntled investors turned their backs on new issues.

The cereals group had lined up a £200m (€300m) high-yield deal to finance part of its £642m buy-out by Hicks, Muse, Tate and Furst, the US private equity firm. Bond investors said bankers at JP Morgan, which was to underwrite the deal, told them last week it was off and that Hicks Muse was looking at other financing options. JP Morgan declined to comment.