Mitchells & Butlers to raise GBP350mln from shareholders
The FTSE 250 pub group had flagged the funding in January and will raise the money at 210p per share, a 36% discount to the close on Friday.
The three main shareholders, Piedmont, Elpida and Smoothfield, which between them own 55% of the All Bar One, O’Neill’s and Harvester chains group, are underwriting the offer.
The trio, which are the vehicles of horse racing tycoons John Magnier and JP McManus, businessman Derrick Smith and currency trader and Spurs owner and currency trader Joe Lewis, added they will consolidate their holdings under the name Odyzean Group.
After the fundraising, they intend to streamline the board though a reduction in the number of independent non-execs, while Odyzean has also been given permission to increase its stake without making a formal offer.
In addition to the new equity, Mitchells & Butlers has arranged an additional GBP150mln three-year revolving loan facility.
Bob Ivell, Mitchells & Butlers chairman, said: “We are pleased to have received the support of our major shareholders and key creditors.
“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.
In January, Mitchells said its latest quarterly revenues fell 67% compared to a year earlier due to the impact of the third UK lockdown.
At that time the pub group said its monthly cash burn was GBP35-40mln plus around GBP50mln of debt payments due in March.
Odyzean added; As a result of the pandemic, Mitchells & Butlers has been forced to close all its venues, with significant negative implications for its cash flows and balance sheet. Without this major equity injection, the prospects for the business, its 1,600 venues, and over 40,000 UK employees would be bleak.”
Shares rose 5.8% to 3,393p.
– adds share price, detail-