£3.7bn bid for Mitchell & Butlers

Feb 5 2008 by jez Davison, Evening Gazette

EMBATTLED pub group Mitchell & Butlers said it was “far too early” to say whether a proposed takeover would have any impact on its Tees Valley operations.

The group, which suffered losses of £274m following a £5bn property deal which collapsed last year, has received a £3.7bn merger proposal from Punch Taverns and “expressions of interest from other third parties”.

Meanwhile, it is undertaking a “thorough strategic internal review” that is expected to be completed by May.

Mitchell & Butlers last month held a charity auction to pull the first pint, won by David Atkinson, to celebrate the opening of its Tall Ships pub in Hartlepool following a £2.3m investment.

A spokesperson for Mitchell & Butlers said: “The Punch proposal will be considered as part of the board’s strategic review. We are looking at all options and it is far too early to say if or how the Tees Valley operations will be affected.

“Recently, we have invested in the area with the opening of The White Horse in Darlington and Tall Ships in Hartlepool and our trading remains resilient in the context of current trading conditions.”

Punch owns around 80 pubs in the Tees Valley and Mitchell & Butlers around 20. The deal would cement Punch’s position as Britain’s biggest pub company with more than 10,500 sites.

Investec Securities said that, if the deal went ahead, the merged company would have 17% of the UK’s pubs market. Shares in M&B gained more than 5% on confirmation of Punch’s proposals.

Last week Mitchell & Butlers’ finance director resigned.