John Lovering, the chairman of Harvester and the All Bar One pubs giant Mitchells & Butlers (M&B), has privately vowed to investors that he will resolve the group's divisive share ownership structure.
At a recent dinner with around 12 leading institutional investors, the former Debenhams and Homebase boss set out his two-year objectives and pledged to "normalise the shareholder register".
The investors hope the move would finally end one of the nastiest boardroom spats of the past 12 months. M&B's share ownership is abnormally skewed towards two activist investors, Piedmont and Epsilon, which own more than 40 per cent of the company between them.
Mr Lovering indicated that he hopes reinstating a dividend payment, possibly by the end of this year, will encourage the two investors to take their money and then sell at least some of their stakes at chunky profits to more traditional funds. The dividend was scrapped in 2008 in a move designed to save the indebted company £60m.
Piedmont, run by billionaire Joe Lewis, and Epsilon, the vehicle of Irish racing tycoons J P McManus and John Magnier, won a bitter battle against the board in January, leading to Mr Lovering's appointment as chairman. The parties ousted directors who they blamed for a derivatives swaps disaster that led to £500m in losses.
Mr Lovering has since reviewed the business, valued at £1.3bn, and has decided to dispose of several brands that are not part of the core pub-dining format. This kicked off with the £91m sale of its Innkeepers Lodge budget hotel chain last month.
The next sell-off could be announced as early as tomorrow, with the Hollywood Bowl chain to be offloaded for around £40m to rival AMF Bowling.
At the dinner, Mr Lovering made it clear that he had two objectives. Aside from diversifying the share register, he wants to steady the share price at a historically more acceptable level, believed to be at least 500p, investors were told. M&B shares closed at 322.8p on Friday, and have not topped £5 since late 2007.
One attendee at the dinner said: "John said that he wanted to get the share price up and 'normalise the shareholder register', which means sorting out Lewis's stake. The objective is to return to the dividend list, which I take to mean a 30 per cent payout [to investors] of the profit M&B makes."
A second investor said Mr Lovering's words suggested that he hoped to persuade both Piedmont and Epsilon to sell their stakes through a private placing with a raft of institutional funds. This would create greater liquidity as shares would be easier to trade, as well as removing any possibility that a big stakeholder would one day consider a takeover attempt.
Mr Lovering won shareholder approval last month for a highly lucrative management incentive plan, which would reward directors if the share price rises.