Punch scraps M&B merger proposal
Punch Taverns has withdrawn its merger proposal for Mitchells & Butlers (M&B) but is still pursuing other possible deals involving the company.
The proposal, tabled on 4 February, involved a 50/50 merger with a cash payment of £175m for M&B shareholders.
A statement to the market this morning said: "Subsequent preliminary discussions with, and preliminary due diligence on, M&B have led the board of Punch to conclude that the terms proposed to M&B are no longer in the best interests of Punch shareholders and therefore Punch is withdrawing its merger proposal."
The statement added that Punch has been approached by a number of third parties in relation to possible transactions involving Mitchells & Butlers which may or may not result in an offer for, or other transaction with, M&B.
The statement added: "Punch is assessing whether any such proposal would maximise value for Punch shareholders.
"A further announcement will be made in due course, if appropriate."
Under the original proposal a merger between Punch and M&B would have created a business worth £11bn and the creation of an estate of 10,400 pubs.
One Punch shareholder, QVT, had made it clear that it was unhappy with the proposed merger terms.
The shareholder said in February: "Punch is the most undervalued company in the world at the moment.
"Its share price represents only half what it is worth and this deal means we would be giving it away for free.
"If it could find debt to make it happen, that would be fine. But in the current form, it is not good enough."
