M&B set to reject second takeover bid from Piedmont

BIRMINGHAM-based pubco Mitchells & Butlers is set to reject a second offer in less than a month for the company from its biggest shareholder Piedmont.

The company, which owns around 22%, is an investment vehicle for Bahamas-based billionaire Joe Lewis which made an approach at the end of August of 224p per share that M&B said undervalued the company.

M&B said today it had been approached again by Piedmont with another possible offer of 230p per share, which it said was a 2.4% discount on its share price at the close of trading yesterday.

In a statement, M&B said today the offer again undervalued the company and would not recommend to shareholders that it be accepted should a firm approach be made my Piedmont.

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When Piedmont made its initial approach on August 27, M&B’s shares were trading at their lowest level since March 25, 2009, and the offer of 224p per shares was a 38% discount on its highest trading level during the period of 361p on January 6, 2011.

Two of M&B’s directors, Ron Robson and Douglas McMahon, were appointed to its board by Piedmont and are not independent for the purposes of the possible offer.