Sept. 12 (Bloomberg) -- Mitchells & Butlers Plc, the U.K. owner of the All Bar One pub chain, said it would reject a possible 230 pence ($3.64) a share offer from Piedmont Inc. because it “significantly” undervalues the company.
Piedmont, which owns 23 percent of Mitchells & Butlers, said in a statement earlier today that it was considering an offer for the remainder of the company after a previous proposal was dismissed. That proposal was for 224 pence a share in cash or stock, Mitchells & Butlers said in a statement.
Mitchells & Butlers posted a full-year loss in 2010 on lower sales of beverages at its outlets. The company sold 333 pubs last year as part of a plan to reduce the number of drinks-oriented budget pubs and expand chains that focus more on food.
“The proposal is being made to stabilize the business,” Richard Farnsworth, a Piedmont spokesman, said today. Piedmont, controlled by U.K. billionaire Joe Lewis, is Mitchells & Butlers’ largest investor.
Piedmont declined to comment on Mitchells & Butlers’ rejection of its possible 230-a-share bid, spokesman George Hudson said by telephone today.
M&B rose 15.5 pence, or 7 percent, to 235.6 pence today in London trading. The shares have declined 33 percent this year.
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