Mitchells & Butlers (M&B) has reached an agreement with James Horler, CEO of 3Sixty Restaurants, and its other shareholders, to continue with the joint venture arrangements, in relation to the development of Ego Restaurants, for a further period.

It will see the previous agreement that M&B’s subsidiary Mitchells & Butlers Retail (No 2 Limited) would be able to acquire the remaining 60% share interest in 3Sixty in August 2021, extended until 1 April 2023.

In August 2018, M&B’s wholly-owned subsidiary Mitchells & Butlers Retail (No 2) Limited, acquired a 40% stake in 3Sixty, from exiting shareholder Luke Johnson, for an initial cash consideration of approximately £4m.

At the same time it entered into a joint venture (JV) agreement with the other 3Sixty shareholders for the development of the Ego business, which currently operates 23 Mediterranean-style family restaurants across the UK.

The terms of the JV include certain other subsidiaries of M&B leasing sites to 3Sixty, at market rent, for conversion to the Ego Restaurants brand. To date 13 sites are leased to 3Sixty under these arrangements.

Following discussions in recent weeks it was agreed that it was in the interests of all parties for the JV arrangements to continue for a further period, with the option arrangements to be become exercisable on or after 1 April 2023.

The maximum amount payable by M&B Retail for the majority shares, will be capped at £40m.

The value of 3Sixty’s assets, as at 31 March 2019 was £9m, and it made an operating loss of £750k for the full year.