M&B board ups the ante by appointing chairman against shareholder's wishes

Published on Tuesday 1 December 2009 20:39

A BOARDROOM row at Mitchells & Butlers escalated yesterday after the pubs chain appointed a new chairman in defiance of its biggest shareholder, writes Victoria Thomson.

Simon Laffin had been one of three candidates vetoed by a board representative of billionaire investor Joe Lewis, who holds a 22.3 per cent stake in the firm.

But M&B said yesterday that Laffin will become chairman with immediate effect and resolved that Richard McGuire, who blocked the appointment on behalf of Lewis's investment vehicle Piedmont, should step down as a director.

On Monday, the All Bar One, Harvester and O'Neill's owner said it planned to approach the Takeover Panel with evidence that a number of key shareholders were seeking to gain control of the board.

M&B said the actions of the Piedmont representative undermined the "independence and effectiveness" of the company's board.

It highlighted the rejection of the three names on its shortlist to replace chairman Drummond Hall and said Piedmont had also called for the resignation of Laffin as senior independent director.

Other big investors in M&B include John Magnier and JP McManus, the Irish horseracing tycoons who between them account for 17.6 per cent of the shares.

The pubs group is due to hold its annual meeting next month, when yesterday's appointment and boardroom changes could be challenged by shareholders.

The company also said Douglas E McMahon, who was appointed to the board as a second Piedmont representative last month, should cease to be a director. Two other non-executive directors, Denis Jackson and Ray MacSharry, appointed in August, should also cease to be members of the board, it added.

Hall, who said Laffin will "work tirelessly for all our shareholders", is to remain as a director while the company attempts to strengthen its board.

Laffin added: "We are moving swiftly and decisively to protect the interests of all shareholders and to maintain a sharp focus on operations."