Major shareholders of All Bar One owner Mitchells & Butlers (M&B) have joined forces to ensure Britain’s largest listed pub chain gets the cash injection it needs to weather the pandemic of Covid-19.
Horse racing magnates John Magnier and JP McManus, Tottenham Hotspur owner Joe Lewis and trader Derrick Smith have consolidated their stakes in FTSE 250 into a new entity, Odyzean. The consortium has declared that it is in a position to make available the entire sum of 350 million requested by M&B.
M&B announced today that it will issue around 167 million new ordinary shares with a subscription price of 210 pence per share, a discount of around 36% to the companies’ share price at the last close. All existing shareholders will have the opportunity to participate in this award.
The advertising giant, which also owns the chains Toby Carvery and Harvester, said it suffered a pre-tax annual loss of 123 million in November, compared to a profit of 177 million in 2019. Latest lockout sees money burnt from 35 to 40 million euros. millions per month.
M&B also said it has secured an agreement with its banks for a new loan of $ 150 million over three years, as long as the placement of the shares is complete.
The merger of Piedmont, Elpida Group and Smoothfield vehicles from major investors gives Odyzean a 55% stake in M&B, which entered the pandemic as one of the largest and strongest listed companies in the industry. hospitality and has seen its actions increase by about 50% this calendar year on the vaccine and the reopening of hopes.
Odyzeans’ preemptive open bid has already been approved by the city’s regulator, The Takeover Panel, although the entity newly owns more than 30% of the voting rights in M&B – a situation that would traditionally mean it would have to make a takeover bid to other shareholders.
Under the terms of the open offer, Odyzean will also be able to purchase other shares without having to make a takeover bid. They will be able “to apply under the excess demand facility for all shares in the open offering which are not taken over by other shareholders.”
Odyzean said he proposed to subscribe in full to the $ 350 million round “in order to meet M&B’s significant capital needs and provide a clear and consistent framework for the consortium’s future relationship with the company.”
M&B has a 12-person board of directors, and Odyzean said on Monday that he intends to review the composition of the board and seek to “streamline decision-making … which could result in a reduction in the level of independent non-executive representation in the future “.
He added that the consortium intended to “reduce the time and costs spent on SOE business.”
Odyzean said: Without this large injection of equity, the outlook for the company, its 1,600 locations and over 40,000 UK employees would be bleak.
M&B President Bob Ivell, President of Mitchells & Butlers, said: “We are pleased to have received the support of our major shareholders and key creditors.”
He said the capital raising and refinancing “will give the company the certainty of the financing it needs to emerge in a stronger position” from the pandemic and to deliver shareholder value.
Shares were up 8% to 355p on Monday at noon.
Numis analysts said: “This transaction will leave M&B with one of the strongest balance sheets in the industry … When the industry reopens, we expect M&B to trade heavily and the valuation will remain attractive.”
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