British pubs and restaurants group Mitchells & Butlers reported slowing sales growth in the fourth quarter, strengthening the hand of prospective bidder Joe Lewis.
The group, which has rejected two approaches from the billionaire currency trader and Tottenham Hotspur owner, said sales growth at pubs and restaurants open more than a year slowed to 0.5 per cent in the nine weeks to September 17th. For the 51 weeks to September 17th, sales were up 2.7 per cent.
M&B, which operates over 1,600 restaurants and pubs and whose chains include All Bar One, Harvester and Toby Carvery, said sales of food grew by 1.1 per cent in the nine week period, a slowdown from growth of 4.9 per cent in the 51 week period.
The company, whose other chains include Browns, O'Neills and Toby Carvery, said the UK consumer environment continued to be challenging and it expected cost pressures to remain next year especially in energy, duty and food.
Mr Lewis, M&B's biggest shareholder, is currently mulling his options having had two approaches for M&B rejected - the last pitched at 230 pence per share, below the current share price, and valuing the business at around £940 million.
M&B today reiterated its stance that the latest approach undervalued the business and said it would not recommend an offer at that level.
Under Takeover Panel rules, Mr Lewis has until October 17th to either formally bid for M&B or walk away.
Irish racehorse magnates John Magnier and JP McManus, who hold a 20 per cent stake and have previously been supportive of Mr Lewis, could hold the key to the company's future.
M&B reported slowing sales growth and deteriorating margins in July. It has also been hit by boardroom upheaval and is currently without a permanent chairman and chief executive.
Shares in M&B, which have lost nearly a third of their value since January, closed yesterday at 252.5 pence, valuing the business at just over £1 billion.
Reuters
