Takeover Panel was wrong on M&B, says Cable

Lib Dem Treasury spokesman tells FSA that there is 'material evidence of a concert party' at the brewer
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In a new twist to the Mitchells & Butler saga, Vince Cable, the Liberal Democrat's Treasury spokesman, has intervened by writing to the Financial Services Authority to express his concerns about the influence being exercised by a group of minority shareholders acting in concert.

The Takeover Panel does not have sufficient powers to investigate the allegations properly, Mr Cable has told the FSA's chairman, Lord Adair. On Friday, the panel backed the two big investors in the All Bar One to Harvester pubs group – Joe Lewis, the Bahamas-based billionaire and Elpida, owned by Irish tycoons JP McManus and John Magnier – against accusations that they worked together to gain control of the group without making a formal bid offer. Mr Lewis owns 23 per cent of M&B through his investment vehicle, Piedmont, while the Irish horse owners, control 17 per cent.

Mr Cable is understood to suggest in his letter to Lord Adair that there is material evidence of a concert party but that he is worried the panel's requirement of proof is excessive – and that it may inadvertently be allowing bad practice to take place. He also informs the FSA of mounting concern among the pub group's 60,000 or so small shareholders as well as big investors, such as Legal & General, that the two minority investors are acting against the interests of the majority.

The controversy will be stirred further this week when Mr Cable and two other MPs – John Grogan, the Labour chairman of the All-Party Parliamentary Beer Group, and Nigel Evans, the Conservative vice-chairman – plan to table an Early Day Motion expressing their worries about the row and the uncertainty this it is causing among the group's 40,000 staff. It is expected that many Midland MPs and members of the parliamentary beer group – a popular association with more than 300 members – will sign up to the EDM next week.

M&B accepted the Takeover Panel's ruling that the two parties – Piedmont and Elpida – did not act in concert before 15 October last year – the last date share purchases were made – and that there was no obligation on them to make an offer. However, the panel has agreed to look into the allegations that the investors refused to sign off the accounts. And M&B has accused the two investor groups – which are domiciled overseas – of colluding to take over the board and of trying to block the appointment of the proposed candidate for chairman, former MP Archie Norman, who recently took over as ITV chairman. It still believes that certain shareholders are using their rights in a manner which will have an adverse effect on control of the company.

The M&B board removed four directors in November, two of whom had been appointed by Mr Lewis, following allegations of misconduct and collusion. M&B's annual meeting is due on 29 January when new board appointments will be proposed and Elpida will forward a motion for the reappointment of Ray MacSharry.