Refinancing & Return of Funds

Mitchells & Butlers PLC
09 October 2003


NOT FOR DISTRIBUTION IN THE UNITED STATES



                            MITCHELLS & BUTLERS PLC

                         REFINANCING & RETURN OF FUNDS


Mitchells & Butlers today announces that it is commencing the marketing of a
£1.9bn securitisation of its UK pubs and pub restaurants business.


Subject to the successful conclusion of the proposed securitisation, Mitchells &
Butlers intends to return £500m to shareholders by way of a special dividend of
68 pence per share. This return will be accompanied by a proportionate
consolidation of the number of shares in issue.  The net proceeds raised from
the securitisation will also be used to repay the Group's existing borrowings,
to fund additional pension contributions and to provide working capital headroom
for the Group.


Commenting on the return of funds, Tim Clarke, Chief Executive said:


'Earlier this year we set out to restructure the balance sheet with a target of
releasing at least £400m of surplus funds to shareholders.  We are able to
confirm today, with the announcement of the securitisation, that we now plan to
exceed that target.'


'This is a further step towards delivering the priorities we set out for the
business at de-merger which were to focus on like for like sales and profit
growth, drive cashflow and returns and refinance the business consistent with a
long term equity growth strategy.'


Commenting on the refinancing Karim Naffah, Finance Director said:


'We believe we have designed the optimal financial structure to support our long
term strategy of owning and developing high take, high quality, managed pubs in
prime locations.  Our proposed securitisation provides appropriate flexibility
to deliver a progressive dividend policy and continue to develop and reposition
the estate over time, in the interests of our shareholders and prospective bond
holders.'


Timetable


In conjunction with The Royal Bank of Scotland and Citigroup as joint Lead
Managers, we will be marketing to potential investors over the coming weeks.
Subject to conditions in the debt markets, it is expected that the
securitisation will be completed in November.


Following the successful close of the securitisation a circular will be posted
to shareholders with full details of the proposed return of funds. A further
announcement will be made at that time.


The bonds will be marketed based on earnings before interest, tax, depreciation
and amortisation (EBITDA) to the end of the third quarter (5 July 2003).  In the
12 months to this date, Mitchells & Butlers plc generated EBITDA of £373m
reflecting the strong cashflows of the estate.



For further information please contact:

Investor Relations
Kate Holligon                                           0121 498 5092
Media
Jeremy Probert                                          0121 498 5547
Finsbury Group - James Murgatroyd                       020 7251 3801


There will be a conference call for analysts and fund managers outside the
United States at 9.30am.  Details of the call are posted on the Mitchells &
Butlers website: mbplc.com.  The replay will be available to persons outside the
United States for one week.


Cautionary note regarding forward-looking statements


This update contains certain forward-looking statements as defined under US law
(Section 21E of the Securities Exchange Act of 1934). These forward-looking
statements can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use words such as
'target', 'expect', 'intend', 'believe' or other words of similar meaning. By
their nature, forward-looking statements are inherently predictive, speculative
and involve risk and uncertainty. There are a number of factors that could cause
actual results and developments to differ materially from those expressed in or
implied by such forward-looking statements. Factors that could affect the
business and the financial results are described in Item 3 Key Information -
Risk Factors in the Mitchells & Butlers plc Form 20-F filed with the United
States Securities and Exchange Commission on 28 March 2003.


This document is not an offer of securities for sale in the United States.  The
securities referred to herein may not be offered or sold in the United States or
to or for the account of benefit of US persons (as such terms are defined in
Regulation S under the US Securities Act of 1933) unless registered under the
Securities Act or pursuant to an exemption from such registration.  There will
be no public offer of the securities in the United States.


                                     -ends-


                      This information is provided by RNS
            The company news service from the London Stock Exchange