M&B shareholder has "no confidence" in group's chairman

Days before its crucial annual general meeting a significant minority shareholder in Mitchells & Butlers (M&B) has indicated it has "no confidence" in chairman Simon Laffin.

Already facing a showdown at tomorrow's AGM in Birmingham with Piedmont Inc., the investment vehicle which represents Joe Lewis and his 23 per cent stake in M&B, the managed pub group has been savaged by another shareholder in the run-up to the meeting.

Elpida Group, the Irish-based investment firm which holds more than 17 per cent of M&B stock, has called for the executive to be barred from chairing tomorrow's annual general meeting.

In a strongly-worded letter to M&B executives Elpida in which it said it would be voting for a "new independent board", it wrote that it was "disillusioned" with the group's loss-making swap deals, it argued that the removal of four directors at the end of last year was "unlawful" and concluded that Laffin's appointment was "unorthodox".

Elpida also slammed M&B - and Laffin in particular - over the group's recent submission to the Takeover Panel, alleging certain shareholders were acting "in concert" and in breach of the takeover code.

"None of these [M&B] allegations were made to us before the complaints were made to the Panel. They came as a complete surprise," it wrote.

Elpida said it had asked for a copy of the evidence submitted by M&B but it had been told by Laffin the group's lawyers had advised against doing so as it would "reveal allegations against other persons".

The firm concluded its letter with a call for a "strong and independent board of directors", one that will focus on "retrieving some, or all of the swaps losses".

When contacted M&B said it was considering its response to Elpida's letter.

Despite Elpida's stance and Piedmont's plans to try and unseat Laffin support for M&B came from Paul Abberley, chief executive of Aviva Investors London, which holds 0.8 per cent of the pub company's shares.

"As long-term shareholders in Mitchells & Butlers, Aviva Investors has been supportive of the board's approach to addressing the issues raised by Piedmont and its actions, and in seeking a compromise solution that reflects the interests of all shareholders . The board's efforts to try and achieve such a compromise have been greatly appreciated.

"It is clearly disappointing that, despite the disruption that had already been caused, Piedmont and its associates have persisted in trying to exert their control over the composition of the board and have not agreed to any substantive compromise .

"This latest approach to doing that, and the absence of a clear case for it, is a real concern for other minority shareholders. It should come as no surprise therefore that we continue to support the board and will not support the protagonists at the forthcoming AGM.

"Whatever the outcome of tomorrow's AGM, we are clear that - individually and collectively - all board members need to be seen to continue to act fairly and in the interests of all shareholders."