The battle for pub giant Mitchells & Butlers (M&B) is expected to take yet another turn today, with its major shareholder due to launch a counterattack. According to a report in The Times today, billionaire investor Joe Lewis is threatening to take legal action against M&B in an attempt to force the pub group to reinstate the two representatives of his Piedmont investment vehicle who were ousted from the board last week. Piedmont, which holds a 23% stake in M&B, will insist to the Takeover Panel today that it is not in cahoots with other rebel shareholders and has never considered making a bid. At a meeting with the Panel this morning, Piedmont will insist that far from undermining the effectiveness of the board, as accused by M&B, it has tried to stop the board riding roughshod over the rights of investors. Piedmont is understood to have concerns about a range of governance issues at M&B, including pension payments and other perks of executive directors, conservative pub property writedowns, possible conflicts of interest among its advisers and unnecessary risk-taking with derivatives. The shareholder has also expressed concern about the gap between M&B’s strong top-line growth and its weaker bottom-line performance. At the weekend, Richard McGuire, one of the non-executives ousted and a representative of Lewis, said that the dispute highlighted a lack of transparency at M&B. McGuire said: "The action taken by M&B is a travesty of corporate governance. Piedmont always acted to defend the rights of all shareholders." Simon Laffin, who was appointed as M&B’s new chairman last week, however, said: “Maguire said that he thought I should resign as a board director and not seek re-election at the AGM. Indeed, if I were to stand, a ‘small number of large shareholders’ would vote against me. Even if I managed to win the vote, such a large dissenting vote would be very embarrassing for me.”