Yates family puts MBO in doubt

Members of the Yates family have thrown the planned management buy-out of Yates Group into disarray, saying they believe it undervalues the business.

The newly-formed Yates Consortium, comprising shareholders holding a combined 20.4 per cent stake in the high street pub group, has appointed Investec Investment Banking to advise on its options.

The consortium has said it will not accept the 140p-a-share offer made by Thorium, or any other offer, unless advised to do so by Investec.

It includes 'a number of individual Yates shareholders, including certain families associated with the founders of the Yates group of companies.'

Thorium, the MBO company led by Yates chief executive Mark Jones and backed by US private equity firm GI Group, must now decide whether it can raise its offer to bring the family on board.

A spokesman for Investec said the family members are concerned that Yates' property portfolio, which includes a significant number of high street freeholds, has not been officially revalued since 1999.

They also believe the heavy investment in refurbishing Yates' outlets over the past 18 months has yet to show though in the sales figures. The family feel that "if the refurbs have been done properly, there is much more long term value in the business than the offer price suggests," said the spokesman.

Thorium has already twice extended the deadline for acceptance of its offer, which has been recommended by the Yates board. The latest deadline is tomorrow, July 22, after which Thorium has said it will consider it options.

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