Sales report gives ammunition to Lewis in battle for M&B

SLOWING sales growth at Mitchells & Butlers drew a frosty response yesterday from Joe Lewis, the billionaire currency trader stalking the pubs and restaurants group.

Lewis, whose Piedmont vehicle sits on a 23 per cent stake in M&B, was seen as having his hand strengthened by sales growth slowing to 0.5 per cent in the nine weeks to 17 September.

For the 51 weeks to 17 September sales were up a healthier 2.7 per cent, as M&B, led by chief executive Jeremy Blood, the former Scottish & Newcastle executive, said the consumer environment was “challenging”.

A spokesman for Lewis said: “It’s a very disappointing report card for all shareholders, obviously, and we are seriously considering our options.”

M&B, which owns the All Bar One and Harvester chains and pubs such as Edinburgh’s Sheep Heid Inn and Deacon Brodies, has rejected two approaches from Lewis.

The company said the latest offer approach, pitched at 230p per share and valuing the business at £940 million, significantly undervalued the assets.

M&B representatives last met Lewis on 26 August when the second takeover approach was made. But, asked about possible future meetings, Blood said: “There’s none scheduled and there’s no call for one really. It [the offer] significantly undervalues the business so he’d have to move significantly.”

Blood also confirmed he had spoken to Irish race magnates John Magnier and JP McManus, who hold a 20 per cent stake through their Elpida investment vehicle and could hold the key to a bid succeeding.

However, he would not say whether the duo were supportive of existing management. M&B’s shares closed yesterday down 6p at 246.5p, still well ahead of Lewis’s proposed price.