Mitchells & Butlers ‘Taps’ Investors For £350m To Bolster Finances

Mitchells & Butlers said it will ask shareholders for £350m as the All Bar One owner moves to shore up its finances in a bid to survive the third national lockdown. The pub chain has announced it will issue about 167m new shares priced at 210p.

The FTSE 250 group, which also owns Harvester and Toby Carvery, told investors that it has secured a new £150m credit facility from banks as part of the financial shake-up.

It comes as M&B fired warnings in November over its ability to continue as a going concern after Covid curbs took their toll on its business. The company’s three biggest investors, which control 55pc of its shares, have formed a “concert party” called Odyzean to support and underwrite the equity raise.

They will also take a more active role in running the company, reducing its number of independent non-executive directors. Douglas Jack, a Peel Hunt analyst, said: “This may trigger corporate governance red flags for other shareholders.”

Chairman Bob Ivell  said: “Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position.”

Last month, the group reported that sales during the 14 weeks to Jan 2 plunged by more than two-thirds. When its establishments were open, sales were down by nearly a third on a like-for-like basis compared to the same period in the prior year.