M&B in move to smoke out plans by rebels to gain control of board

Published on Monday 30 November 2009 21:15

PUBS giant Mitchells & Butlers yesterday said it is to press the City's Takeover Panel to rule on whether powerful rebel shareholders are attempting to gain control by the back door.

M&B said that Piedmont, the investment vehicle of Bermuda-based billionaire Joe Lewis that owns 23 per cent of the group, had blocked the appointment of an independent chairman.

The company, which has 2,000 pubs in the UK, said Piedmont had vetoed three candidates at the final stage – one of whom is understood to be former Asda boss Archie Norman – despite being involved in the hiring process from its beginning.

M&B said: "The Panel on Takeovers and Mergers has been approached and a submission will be made imminently regarding the cumulative evidence that a number of shareholders have been seeking to gain control of the board and of the company to advance the interests of a small group of shareholders at the expense of others."

The group said those shareholders had also requested the resignation of the group's senior independent director, Simon Laffin. M&B said Laffin was told that if he did not resign, they would vote against his election at the January AGM.

The other key investors in M&B are John Magnier and JP McManus, the Irish horse-racing tycoons who between them own 17.5 per cent of the shares. They are friends of Lewis, who also owns English premiership football club Tottenham Hotspur, but there is no suggestion they are working together in relation to M&B.

It is understood that Norman, who is also a former Conservative MP, had privately decided he could not take up the M&B role in the immediate future due to the scale of his new challenge at struggling broadcaster ITV, where he was appointed chairman in November.

M&B – whose main chains include All Bar One, O'Neills and Toby Carvery – also said yesterday it had an "increasingly difficult relationship" with the relevant investors that "could potentially undermine the independence and effectiveness of the board".

Paul Hickman, drinks analyst at broker KBC, said: "The sense is that Lewis is exerting a restraining influence on the group. The possibility this raises is that if the majority board is successful in restraining the influence of Lewis, it could get involved in the land grab in the sector or even raise money."

M&B has about 90 pubs in Scotland, including the Horseshoe Bar in Glasgow and Deacon Brodie's in Edinburgh.

The company also said yesterday it was trying to strengthen the board through further independent appointments and to identify an independent candidate to succeed Drummond Hall as chairman.