The buyout market has got off to a shaky start with only £3.1 billion of deals recorded so far this year.

One of the main causes is the dramatic decline in public to privates, according to CMBOR, the Nottingham-based analysis centre founded by Barclays Private Equity and Deloitte.

It comes despite the UK buy-out market hitting an all time high in 2005 of £24.2 billion.

In 2005 public to privates boomed hitting £7.2 billion from 20 transactions. Yet, for the first three months of 2006 they stand at just £485 million from four deals - £404 million of which came from the take private of the Peacock Group, which was bought by a hedge fund consortium.

Phil Griesbach, director of Barclays Private Equity in the Midlands, said considering the amount of recent speculation about private equity bids for public companies, it was "astonishing" that public to privates seem to have dried up.

"There seem to have been an increasing number of approaches made over recent weeks, but nothing is being consummated - all foreplay and no finish," said Mr Griesbach.

"It seems private equity houses are having their bids rejected out of hand by shareholders in the hope that a bigger offer will be made - something that so far the private equity firms have been baulking at. With the huge funds that have been raised, there is a lot of money in the market looking for a home and public company shareholders have clearly decided they should be demanding a much larger premium.

"Private equity has become a victim of its own success."

Nick Johnson, corporate finance partner at Deloitte in Birmingham, said: "While it is still feasible that we could see a consortium of the big private equity houses make a serious play for a FTSE 100 company,

this year's public to private figures show that the corporate market is becoming much more shareholder value focussed.

"Influenced by the private equity model, plc boards are developing clear, strategic plans for growth as well as working bank debt harder for special dividends and buy back plans. By becoming more familiar with private equity tactics, the corporate market is finding it easier to block private equity bids and persuade shareholders to support alternative plans for generating value."

There were 62 MBIs and 109 MBOs in January to March compared to 61 and 104 respectively in the same period last year.

However, the MBI value at £1.9 billion and the MBO value at £1.1 billion compared to £2.8 billion and £2.6 billion in the same quarter of 2005.

Public to private deals represented 16 per cent of the value of all deals in the first quarter of the year - compared to 30 per cent in all of 2005.