Mitchells & Butlers Plc, the U.K. owner of the All Bar One pub chain, said John Lovering told the board he plans to resign as chairman and a director of the company “later this year.”
The former chairman of Debenhams Plc and Homebase Group Ltd. will remain while the pub and restaurant group appoints a successor, the Birmingham, England-based company said in a Regulatory News Service statement today. Lovering joined Mitchells & Butlers as chairman last year.
Lovering, who is also vice-chairman at Barclays Capital, will return to the private-equity industry after leaving Mitchells & Butlers because he’s fed up with activist shareholders, the Daily Telegraph reported, without saying where it obtained the information. Mitchells & Butlers declined to comment when contacted by Bloomberg News.
Earlier this month, Pension Investment Research Consultants Ltd., a company that advises investors on corporate governance issues, advised the company’s stakeholders to oppose the re-election of Lovering as chairman at the annual general meeting scheduled for Jan. 27. The investor activist group said Lovering was nominated to become chairman last year by Piedmont Inc, the biggest investor in the pub group.
“We have concerns over the relationship between the board and 22.75 percent stakeholder Piedmont Inc., an investment vehicle of which the ultimate owner is Joe Lewis,” PIRC said in a report published Jan. 10.“There is no independent representation on the board in our view.”
Piedmont has the right to nominate two directors, which raises the risk that the composition of the board will not safeguard the interests of all shareholders, PIRC said in the report.
Last year, the pub owner posted a full-year loss on lower sales of beverages at its outlets. Mitchells & Butlers sold 333 public houses last year as part of Lovering’s plan to reduce the number of drinks-oriented budget pubs and expand chains that focus more on food.
Lovering is “seen as a change agent” and the sale last year “will change the nature of what it does,” Paul Hickman, an analyst with Peel Hunt LLP said by phone today. Hickman recommends buying the stock.
Mitchells & Butlers shares shed 2 pence, or 0.6 percent, to 347 pence at the 4:30 p.m. close in London trading, valuing the company at 1.42 billion pounds ($2.27 billion).