Mitchells & Butlers (M&B) has thrown down the gauntlet to potential buyers with market-leading sales growth.
In the three months to April 22, the UK's biggest managed pub operator reported accelerated like-for-like sales growth of 4.3 per cent, with total retail sales up 3.6 per cent in the first half of its financial year.
M&B, which has already rebuffed an 'informal' bid approach from Robert Tchenguiz's R20 consortium, aimed to keep shareholders on-side with a pledge of earnings per share growth of 'not less' than 17 per cent for the 28 weeks to April 22.
Up to £500m may also be returned to shareholders through a refinancing programme. However M&B confirmed it is also considering investing in acquiring the standalone Whitbread pub restaurants which went up for sale this week.
The company believes that "Mitchells & Butlers' brands and operating skills could add considerable value" to the Whitbread portfolio. Whitbread plans to sell all its pubs which do not trade alongside a Premier Travel Inn.
Food sales have continued to drive sales growth at M&B, whioch operates brand including All Bar one, Scream, Sizzling Pub Company, Harvester and Toby Carvery.
M&B's pubs have served 80m meals over the last 12 months, while average weekly sales per pub have increased by 7.1 per cent to £17k.
Although stressing that it is 'early days' following Scottish smoking ban, the 5 per cent of M&B's 2000 pubs located in Scotland have continued to 'generate good sales growth' since March 26, with pubs seeing an improvement in food sales.
R20's initial approach to M&B was pitched at 550p a share. The City expects Mr Tchenquiz, owner of Laurel Pub Company, to return with an offer closer to 600p a share.