Greene King and M&B — perfect partnership?

Speculation as to the reasons will be rife. Some will wonder if Lewis himself was taken aback by the ferocity of the opposition he faced — and decided to bide his time. A statement referred to market turmoil and it could be that he thinks he will pick up the part of M&B he doesn’t own even cheaper if he waits a while.

It could be that the Elpida block, now controlling a slightly larger stake than Lewis, were simply unwilling to back the move to go private, not least because its average buy-in price was some considerable way above the suggested Lewis offer price.

So it’s back to the status quo at M&B, with Lewis promising to be an active and engaged shareholder, which means, in reality, the likelihood of active use of his blocking rights over issues such as asset sales. It’s all eyes now on who is selected to become the next full-time chief executive and chairman of M&B.

Sources close to Lewis told me that he wanted an out-and-out operator in the job of chief executive, someone with lots of senior-level experience running managed food-service outlets. He’s owned a good-sized restaurant business in the United States, Tavistock, for almost a decade — and his associates insist he knows exactly the kind of chief executive he’s looking for.

Names in the frame include Graham Turner who used to run Unique Pub Company and currently runs Café Rouge operator Tragus and serial entrepreneur David Page, whose CV includes brands such as Gourmet Burger Kitchen (GBK), the Real Greek and Tootsies.

One intriguing prospect is Greene King, which, according to the Financial Times, tabled a nil-premium 360p-a-share “merger-of-equals” offer for M&B in the spring. The offer would have seen Greene King chief executive Rooney Anand take the same job in the enlarged group and, according to reports, was conditional on the larger M&B shareholders such as Joe Lewis giving up their two seats on the board.

There’s some speculation that Greene King, encouraged by a number of its shareholders, will return to the fray now Lewis has declined to bid. The merger of Greene King and M&B would create a 2,600-strong block of high-quality managed pubs, making it the largest player in the UK eating and drinking-out sector by some distance with a 4% market share. It would also create, by one estimate, around £100m of annual cost savings. Such a merger would create a powerful array of brands.

It’s also got to the stage where Greene King can claim the stronger better track record in running managed pubs, with consistently strong like-for-like gains. Certainly, Greene King has been positioning itself as an increasingly retail-led company, with its leased and tenanted pubs providing cashflow to fund its expansion in this area.

In fact, you wonder how long Greene King would retain its tenanted pubs when a sale could further fuel its managed pubs expansion.