Annual General Meeting

RNS Number : 7356F

Mitchells & Butlers PLC

18 January 2010

 



Mitchells & Butlers plc (the 'Company')

Annual General Meeting

The Association of British Insurers ('ABI') wrote to the Company last week on behalf of its members in their capacity as institutional investors.  The letter stated that a compromise agreement with Piedmont Inc. would be acceptable, even though it would mean the Company sacrificing some key governance principles.  The letter added that a benchmark for such a compromise could be the arrangement proposed by the Board previously which is set out below.  The letter made clear that the interests of all parties should be respected and that there should be the safeguards in place to protect all shareholders, as envisaged in the Board compromise.  The Mitchells & Butlers Board welcomes this statement.  

The Board has continued to seek a compromise with Piedmont Inc. On 8 January, after lengthy discussions between our Chairman, Simon Laffin, and Piedmont's proposed Chairman, John Lovering, and further with Piedmont's advisers Lazard, the Board approved, and communicated to Lazard, a compromise offer. This suggested, inter alia, that the Board have parity between directors nominated by Piedmont and those appointed through the normal Board process, with John Lovering taking over as Chairman and Simon Laffin reverting to his previous role of Senior Independent Director. The key elements of this offer are attached to this announcement at appendix 1.

Though the Board has yet to receive a formal response to this offer from Piedmont, Piedmont's advisers, Lazard, have informed the Company that it is not acceptable. The Board therefore retains its original recommendations to shareholders on how to vote at the AGM (see appendix 2).

In considering how to respond to Piedmont's proposal, the Board recognises the right of shareholders to nominate directors and, at the relevant General Meeting, to contribute to the composition of the Board. However, it does not believe it is appropriate for one 23% shareholder to nominate and appoint both the Chairman and a majority of the Board. Rather the Board must manifestly be seen to protect all shareholders interests equally.

By recommending shareholders vote in favour of two of Piedmont's nominees, the Board believes it has balanced the wishes of Piedmont with those of all shareholders. The decision to recommend Mr Burke and Mr Lovering arises, in the case of the former, as a result of the Board's assessment during the recent nomination process for Chairman. In the case of Mr Lovering, in addition to his extensive experience and success as a retailer, it reflects his helpful efforts to broker the compromise set out below. The Board does not express any views on the merits or independence of Mr Blood and Mr Balfour, and no conclusion on these should be inferred.

The Board remains willing to pursue the compromise offer made to Piedmont and will continue to be available to do so up until the AGM next week.

We urge all shareholders to vote in line with our recommendations.

Appendix 1:

The key elements of the Board's compromise offer are:

1. The Board of Mitchells & Butlers would recommend the 4 directors nominated by Piedmont.

2. Piedmont would vote in favour of the resolution to reappoint Simon Laffin and Tony Bates.

3. The current Board members and Piedmont would support John Lovering becoming Chairman and Simon Laffin reverting to being Senior Independent Director immediately following the AGM.

4. Piedmont would nominate one representative to be voted on at the AGM who will be supported by the Board. A second representative would be appointed by Piedmont on 31 March 2010. The Board would go through the process of identifying a new independent non executive director in accordance with the Combined Code on Corporate Governance. Piedmont and its representatives would support Mr Lovering's recommendation on this appointment.

5. The Company would inform The Panel on Takeovers and Mergers that it has reached a compromise agreement with Piedmont that, in its view, addresses the issues raised going forward.

6. Piedmont would commit not to pursue or support any litigation against the Company or any of its directors.

7. Piedmont would, for a period of 12 months following the AGM, vote in accordance with the recommendations of Mr Lovering with regard to appointments and dismissals of directors of the Company.

8. The Company would not pay Piedmont's costs.

9. Piedmont would support all standard AGM resolutions.

10. Piedmont would withdraw its resolution for the dismissal of Drummond Hall who would elect to step down from the Board immediately following the AGM.

Appendix 2

The Board's Voting Recommendations

We recommend that you vote in favour of the resolutions to appoint:

Tony Bates (resolution 3a)

Simon Laffin (resolution 3b)

Ron Robson (resolution 3c)

John Lovering (resolution 12a)

Simon Burke (resolution 12d)

We recommend that you vote against the resolutions to appoint:

Michael Balfour (resolution 12b)

Jeremy Blood (resolution 12c)

We recommend that you vote against the resolution to remove:

Drummond Hall (resolution 13)

In addition, we recommend that you vote in favour of the other resolutions proposed by Mitchells & Butlers plc, as set out fully in the AGM Notice sent to shareholders on 17 December 2009, as follows:

1) Receipt of financial statements;	7) Disapplication of pre-emption rights;
2) Approval of remuneration report;	8) Authority to purchase own shares;
4) Reappointment of Auditors;	9) Political donations;
5) Auditors' remuneration;	10) Articles of Association; and
6) Authority to allot equity securities;	11) Notice of Meetings.

For further information, please contact:

Corporate Affairs:

Erik Castenskiold

[phone]

Media:

James Murgatroyd (Finsbury Group)

[phone]

Notes for editors:

Mitchells & Butlers owns and operates around 2,000 high quality pubs in prime locations nationwide. The Group's predominantly freehold, managed estate is biased towards large pubs in residential locations. With around 3% of the pubs in the UK, Mitchells & Butlers has 10% of industry sales and average weekly sales per pub almost four times greater than that of the average UK pub.

Mitchells & Butlers' leading portfolio of brands and formats includes Ember Inns, Harvester, Sizzling Pub Co., Toby Carvery, Vintage Inns, Crown Carveries, All Bar One, O'Neill's, Nicholson's and Browns. In addition, Mitchells & Butlers operates a large number of individual city centre and residential pubs.

 

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