Mitchells & Butlers plans to return £500 million to shareholders |
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Published
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Fri, 28 Apr 2006 15:25
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LONDON: Pubs group Mitchells & Butlers Plc., which has recently been the target of billionaire Robert Tchenguiz, has announced that it intends to return at least 500 million pounds to shareholders this year.
The company said it will study prospects of acquisitions available to it before deciding on the quantum of money to be returned. It said following a planned refinancing, possibly a securitisation, "the board will assess whether some of those funds could be used to enhance shareholder returns through deployment to acquire additional assets on attractive terms".
Any cash return total would include the remaining 59 million pounds of a 100-million-pound share buyback, which has been suspended while the company is in an offer period.
The company's acquisition targets include some 250 pubs put up for sale by Whitbread Plc. Whitbread had announced that it may stop running TGI Friday's and Pizza Hut restaurants in the U.K. and will sell nearly half its pub-restaurants in order to focus on its budget hotels business.
A consortium led by Tchenguiz had made an informal offer to buy Mitchells & Butlers for 2.7 billion pounds. Tchenguiz's investment vehicle, R20, had offered 550 pence-a-share for the company.
The company's board has not formally turned down the proposal. It said it can only properly consider a formal written proposal. The U.K. Takeover Panel has ruled R20 must formally bid by May 8 or walk away.
Mitchells & Butlers had come into being after Six Continents Plc. separated its hotel and pub businesses in 2003. It runs around 2,000 pubs and serves 80 million meals a year through restaurant bar chains including O'Neill's, All Bar One, Harvester and Toby Carvery.
The company reported that sales at outlets open at least a year rose 4.1 per cent during the 29 weeks ended 22 April 22. For the last 13 weeks of this period, same-outlet sales had gone up 4.3 per cent.
The company hoped to have operating profit before one-time items of at least 143 million pounds for the fiscal first half and a pretax profit of not less than 91 million pounds.
Chief executive officer Tim Clarke said Friday the company has hired Royal Bank of Scotland Group Plc and Citigroup Inc. to advise it on a refinancing during the second half of 2006.
The company's shares rose by 10.5 pence, or 2.1 per cent, to 505.75 pence in London.
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