Mitchells and Butlers row hots up
Piedmont, the investment vehicle run by Joe Lewis, has fired another shot in the controversial row over the running of Mitchells & Butlers (M&B) calling for the appointment of four well-known retail and leisure industry figures to the board.
The group, which has a 23% stake, has put forward John Lovering, the outgoing chairman of Debenhams, along with Mike Balfour, the founder of Fitness First, Jeremy Blood, former head of Scottish & Newcastle UK, and Simon Burke, the chairman of Majestic Wine.
In its defence the M&B board has this morning written to its shareholders outlining the reasons why it believes Piedmont is acting in tandem with other shareholders and calling for support at next month's AGM.
Referring to its decision to remove four representatives of Piedmont and Elpida, the letter states: "The board therefore decided, in its duty to have a fully functioning independent board for all shareholders, that it had to remove the four directors. It also decided to ask Mr Laffin to become chairman as he had the skills and experience to lead the Board through this difficult time.
"Since these events, your board is back working effectively, leading and supporting executive management in their core job which they do best; that of running pubs efficiently and effectively, serving our millions of customers.
"With over 40% of the equity in the hands of Piedmont Inc and Elpida, these two shareholders could together have a sufficient number of votes to defeat any resolutions put by your Board on behalf of all shareholders at the AGM on 28 January 2010. In situations such as these, every single vote counts.
"Therefore, we would ask you to support all resolutions being put to the meeting and recommended to you by your board. In particular, the Board feels that it is essential to retain a majority of strong independent directors and so urges you to vote for the re-election of both Mr Bates and Mr Laffin. We sincerely trust that we can count on your support.
Piedmont has also said it would call on shareholders at the annual meeting next month to remove Drummond Hall as a nonexecutive director "if he has not vacated office in accordance with his stated intention".
He recently handed the chairmanship to Simon Laffin.
The nominations of the four men follow the decision by M&B to remove Piedmont's two board representatives in addition to two other non-executives.
Lovering told The Times this morning: "Mitchells & Butlers is a great company which needs a period of stability and normality. It needs a board of strong, proven independent individuals with good retail and consumer goods experience. The board must quickly secure the support of all its shareholders as it develops and implements a strategy for the tough economic climate."
M&B has reported Piedmont to the Takeover Panel, claiming it is acting in concert with other shareholders, including JP McManus, the racing tycoon, and John Magnier.
