The pub group Mitchells & Butlers has recommended that shareholders vote against the election of two of the four board directors put forward by Piedmont, the investment vehicle of its largest shareholder Joe Lewis, after intensive negotiations over the past month. M&B urged shareholders to vote against the appointment of Michael Balfour and Jeremy Blood, on the grounds that a single shareholder, with a 23 per cent stake, should not be in a position to decide the majority of the board.
Last year, the spat between M&B and Piedmont was made public when they alleged that Mr Lewis’s investment vehicle of working with certain other shareholders to take control of the company, which Piedmont vehemently denied.
But M& B's board has recommended that shareholders to vote in favour of the election of Simon Burke, the non-executive chairman of Majestic Wine, and John Lovering, the former chairman of Debenhams. The pub group is also believed to have suggested that Mr Lovering becomes chairman, but Piedmont is thought to have rejected this proposal.
The board of M&B – who appointed Simon Laffin, the former Safeway director, as chairman last year - has recommended shareholders vote to re-elect Mr Laffin as chairman.
Last week, Mitchells & Butlers delivered a robust Christmas trading statement.
Yesterday, a M&B spokesman said: “The board has tried exceptionally hard to reach accommodation with Piedmont and is saddened that they would not accept what we thought was a major compromise. It is not clear to us what Piedmont want apart from control of the board and the chairmanship. The current board and management team are leading the business to continue to deliver strong performance as demonstrated last week.”
He added: “Throughout this process all we have wanted is a balanced board that acts at all time in the interests of all shareholders without fear or favour. If we had strong enough independent representation there would be enough checks and balances to protect all shareholders. Reluctantly, the board and I felt the chairmanship was a price we would be prepared to pay to reach accommodation.”
A Piedmont spokesman said: “Piedmont has nominated four independent, highly qualified director candidates. All shareholders will recognize their strong retailing and industry experience. We believe the board has provided misleading advice to shareholders by suggesting they are in any way affiliated to Piedmont.”