Shares in Mitchells & Butlers (M&B) climbed 19p yesterday to close at 401p on talk that the company had received takeover approaches on the back of its failed property deal.
Speculation suggested that the company had already received expressions of interest from private equity groups and potential trade buyers, while rumours that Punch Taverns was interested in part or all of M&B’s estate also resurfaced.
M&B yesterday initiated a strategic review, after closing its hedge position on its proposed £4.5bn property joint venture with Robert Tchenguiz with a total post-tax loss of £274m, or a pre-tax loss of £391m.
In a conference call with analysts, Tim Clarke, the group’s chief executive, who offer to resign 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-added to be realised.”
Clarke added that M&B would also listen to any proposal, which would deliver “material and certain value to shareholders”. He also did not rule out the possibility of acquisitions.
Douglas Jack, analyst at Panmure Gordon’s, said that the rise in M&B’s share price was on the "expectation of a takeover”, while Evolution Securities said M&B's management is “clearly susceptible” and added there “must be potential to see value released by M&A”.
Mark Brumby at Blue Oar Securities, which yesterday upped its stance on the company to “buy” from “hold” said M&B’s “shareholders (although now rather an eclectic bunch) will not want the company to be sold on the cheap and are likely to make their voices heard”.
Dresdner Kleinwort said it expects suggestions of a deal with Punch to re-emerge but thought “meaningful tail disposals could occur”.
M&B also said that if market conditions recovered sufficiently it would still look to release value from its property.
It said that it intends to appoint a non-executive director with specialist property knowledge and would seek to give its investors more clarity on the value of its property portfolio going forward.
