Mitchells & Butlers to seek ruling from UK watchdog

Pubs operator Mitchells & Butlers will ask Britain's takeover watchdog to rule whether rebel shareholders are attempting …

Pubs operator Mitchells & Butlers will ask Britain's takeover watchdog to rule whether rebel shareholders are attempting to gain control of the group after they blocked the appointment of a chairman.

M&B said today that Piedmont, the investment vehicle owned by billionaire Joe Lewis, which owns 23 per cent of the group, had obstructed the appointment of an independent chairman and vetoed three candidates at the final stage despite being involved in the hiring process from its beginning.

"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," M&B said in a statement.

Weekend press reports said Lewis had blocked the appointment of Archie Norman, who was this month appointed chairman of broadcaster ITV, as chairman of M&B.

Piedmont could not be immediately reached for comment.

Shares in M&B, which have increased 60 per cent this year, were 1.4 per cent up at 255.5 pence by 0830 GMT, valuing the company at around £1 billion.

"The sense is that Lewis is exerting a restraining influence on the group," said KBC Peel Hunt analyst Paul Hickman.

"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."

Rival pub firms Greene King and Marstons have recently tapped the market for cash to buy up distressed pub assets from struggling groups Punch Taverns and Enterprise Inns.

The owner of Harvester, Toby Carvery and All Bar One added that Piedmont had also demanded the resignation of senior independent director, Simon Laffin, advising him that if he did not leave the company a small number of large shareholders would vote against his election at the company's annual general meeting in January 2010.

M&B also said it was trying to strengthen the board through further independent appointments and to identify an independent candidate to succeed Drummond Hall as chairman.

Reuters