M&B offers compromise in board appointments row

Mitchells & Butlers (M&B) has offered disgruntled shareholders a compromise in its efforts to end to a damaging row which threatens the corporate future of the managed pub group.

Responding to calls to accept four of its nominations from Piedmont Inc., the investment vehicle which represents the interest of Joe Lewis, owner of 23 per cent of the company, M&B said it recognised "the right of shareholders to nominate directors and, at the relevant general meeting, to contribute to the composition of the board".

However M&B said it wasn't "appropriate" for a shareholder with less than a quarter of the group's shares to nominate appoint both a chairman and a majority to the board.

"The board must manifestly be seen to protect all shareholders interests equally," the group said in a statement.

After talks between M&B's chairman Simon Laffin and Piedmont's nominee for the role, John Lovering, the pub group said it was offering a compromise whereby all board members would have parity, and was recommending that Lovering be voted into the chairman's role at the forthcoming AGM.

Laffin would revert to his position as a senior independent director immediately after the AGM, the group said.

M&B said it would accept two Piedmont nominations to its board, as it is legally required to do, however it was still recommending shareholders voted against the two of Piedmont's suggestions for board appointments, Michael Balfour and ex-Scottish & Newcastle managing director Jeremy Blood.

In return, Piedmont would not take any legal action against the group or any of its directors and would vote, for a 12 month period following the AGM, "in accordance with the recommendations of Mr Lovering with regard to appointments and dismissals of directors of the company".

It also called for Piedmont to support all standard AGM resolutions and withdraw its own resolution for the dismissal of Drummond Hall, who would elect to step down from the board immediately after the AGM.

M&B said it yet to hear from Piedmont on the proposals.

Yesterday Labour MP John Grogan, who also heads up the All-Party Parliamentary Beer Group, called on disaffected shareholders to let the group's management get on with the job of running the company, or launch a bid for the business.