M&B shareholder offers olive branch in board row

In a crucial week for Mitchells & Butlers (M&B), shareholder Joe Lewis has apparently offered a compromise to the pub group's senior management to take the heat of a row over composition of the All Bar One operator's board.

According to the Observer​ Lewis, who owns 23 per cent of M&B, says he plans to agree with what he called an M&B suggestion that an extra independent non-executive director be added to the board.

However he apparently remains adamant that chairman Simon Laffin leaves his post, as well as non-executive director Tony Bates, after this week's crucial annual general meeting (AGM).

Responding to the offer, M&B said: "Piedmont Inc.'s position seems not to have changed in any substantive respect from that previously stated. It is understood that Piedmont Inc. will vote against the reappointment of both Tony Bates and Simon Laffin at the AGM. On this basis the anticipated outcome continues to be that a majority of the board would be nominated by Piedmont Inc., as would the chairman."

As the row between Lewis's representatives and M&B continues the pub operator has been attempting to rally support ahead of this week's AGM, which takes place this Thursday (January 28).

M&B said is was "highly appreciative of the continued support of its institutional shareholders". It said it looked forward to hearing the views of many of its 70,000 private shareholders at the AGM. "In the mean time the board remains ready to listen to any meaningful compromise which protects the interests of all shareholders," it added.

While Piedmont Inc., Lewis's investment vehicle, and Elpida, an Irish investment group, are looking to overhaul the board, the Association of British Insurers - which represents large institutional shareholder - appeared to back M&B's current management.

City analysts expect former Laurel Pub Company chairman and current Debenhams boss John Lovering to become M&B's chairman at the group's AGM.

Last week M&B chief executive Adam Fowle outlined to City analysts the group's plans to expand six of its key retail brands, with the emphasis on its food-led operations.

The group also hinted it would undertake a series of sale and leasebacks to raise cash, although a spokesman for M&B said there were no plans to do such deals "of any scale at the moment".

M&B also said it would look at buying a number of leasehold sites where feasible, although again it did not outline how many it was after.