Musical chairs at M&B finally comes to a halt - for now

Annual general meetings (AGMs) tend to be relatively prosaic affairs. Presentations are given by the company's management on trading; votes on resolutions are cast - generally without incident - and small shareholders get a chance to quiz executives of their company on pretty much anything that takes their fancy.

Sometimes there can be awkward questions, for example on executives' pay. But rarely are there fireworks.

There were, however, numerous metaphorical rockets whizzing around the International Convention Centre in Birmingham last month when Mitchells & Butlers' (M&B) held its eagerly-awaited AGM.

Such had been the publicity surrounding the row between M&B and certain large minority shareholders that the auditorium was packed, and late-comers were decanted into a side hall where the meeting was relayed via closed circuit TV.

M&B chief executive Adam Fowle got proceedings under way - revealing that chairman Simon Laffin had been barred from hosting the event due to a legal challenge from shareholders Elpida - before inviting the top man to speak in a personal capacity.

Laffin, who would later be voted off the board, told a hushed hall his had been a "busy" tenure since being appointed in December last year. He'd been the subject of several personal attacks in recent weeks, he said, and he warned that certain shareholders - referring to billionaire Joe Lewis's Piedmont Inc vehicle and Irish investment firm Elpida, which were seeking to overhaul the board - should not assert control at the expense of all shareholders in the company.

Laffin said the board had sought a "substantial compromise" in its fallout with Piedmont and Elpida, a claim the latter later rejected. Unlike the silence which followed a lengthy statement by a representative of Elpida, which pulled no punches in its criticism of the board's management of M&B, Laffin's comments were met with loud applause from the floor.

Petty, pathetic machinations

After the AGM it was confirmed that Laffin, plus director Toby Bates and former M&B chairman Drummond Hall, had been chucked off the company's board. But not before small shareholders had voiced their concerns. One slammed the activities of Piedmont and Elpida as being nothing more than "petty, pathetic machinations".

Another, Mike Fisher, said: "This is the best operator of pubs in the UK. If people aren't happy with the progress that's being made why don't they go off and buy shares in Punch Taverns?", a rhetorical question that prompted laughter and applause.

But M&B did not have it all its own way. One small shareholder expressed his displeasure at not receiving a dividend for some time, while another wondered at pay rises for executives in the region of five per cent while earnings per share had headed south to the tune of 23 per cent.

Yet these were exceptions; the general tone of those asking questions from the floor was anger at the treatment of the company's management at the hands of a couple of large minority shareholders.

With the AGM now out of the way there is undoubted relief throughout the upper reaches of the company that the 'shoe has finally dropped' on the matter of the board's composition. But uncertainty remains, and new chairman John Lovering's review could prove to be a pivotal turning point for the company.