Punch Taverns, Greene King and Marston’s are believed to be amongst the groups considering a £4bn-plus bid for Mitchells & Butlers (M&B), which confirmed yesterday it had received a number of approaches.
Private equity groups Apax Partners, CVC and Permira are also thought to be running the sliderule across the managed group, along with Robert Tchenguiz’s R20 group, which again raised its stake in the business yesterday.
Yesterday the pub and restaurant operator announced that its advisors Citigroup had received “preliminary and tentative expressions of interest in the company” from a number of parties.
M&B said that no discussions had taken place and that there was no certainty any offer for the company would be forthcoming.
Its shares closed up 67p, or 17%, to 468p, valuing the group at £4.4bn, including debt.
The interest followed M&B’s announcement that it had initiated a strategic review, after closing a hedge position associated with its aborted £4.5bn property joint venture with Robert Tchenguiz, resulting in a total post-tax loss of £274m.
Tchenguiz yesterday upped his holdings in the company to 23.1%.
Douglas Jack, analyst at Panmure Gordon, said: “If a takeover can be executed, R20, Tchenguiz’s investment vehicle, would be able to merge M&B with its other pub acquisitions (SFI, Yates, Laurel and La Tasca) and strip out the freeholds. M&B management might expect to retain their jobs if compliant.”
Speculation also resurfaced that Punch Taverns was interested in part or all of M&B’s estate.
However, Jack, was quick to play down the possibility of Punch being a possible bidder.
He said: “Punch Taverns would be the most credible bidder, by virtue of it being able to reduce M&B’s £80m of annual central costs.
“However, the transaction would be earnings dilutive for Punch above 420p per M&B share even if one assumes it generates £80m of central and purchasing synergies and raises £650m of incremental debt.”
In a conference call with analysts yesterday, Tim Clarke, M&B’s chief executive, who offered his resignation over the collapse of the property deal, said the company would look “with an open mind” at all opportunities for creating value and would update the market at the time of its interim results in May.
He said: “We would obviously be looking at any consolidation opportunities where there was an opportunity for synergies and value to be realised.”
Clarke added that M&B would also listen to any proposal, which would deliver “material and certain value to shareholders”.
