Mitchells & Butlers Slumps Most in Three Years on Piedmont
Mitchells & Butlers Plc (MAB), the owner of the All Bar One chain, fell the most since May 2009 in London trading after Piedmont Inc. said it won’t proceed with an indicative offer.
Mitchells & Butlers shares declined 17.4 pence, or 6.9 percent, to 235.10 pence, the most since May 21, 2009 at the 4:30 p.m. close. The stock has fallen 33 percent this year.
Piedmont, the investment vehicle owned by Bahamas-based billionaire investor Joe Lewis, is Mitchells & Butlers’ second- largest shareholder, owning 23 percent of the company. It was mulling a potential offer of 230 pence a share, Piedmont said Sept. 12. Today the company said it had decided not to go ahead.
“Since we made our proposal economic conditions have deteriorated, market volatility has increased and M&B’s trading statement suggested further weakness,” Piedmont spokesman George Hudson said in an e-mailed statement. “The fundamental valuation and outlook is now more uncertain and clearly there is increased risk around the business. As a result we have decided not to make an offer for the business.”
Mitchells & Butlers will continue to focus on its growth strategy, the Birmingham, central England-based company said in a separate statement. Piedmont’s indicative offer would “substantially undervalue” the company in the view of its independent directors, it said.
Piedmont’s possible offer was described at the time as “insulting” to other shareholders by Standard Life Investments, an investor in Mitchells & Butlers.
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