Tchenguiz abandons £2.7bn bid for M&B

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The Independent Online

Robert Tchenguiz walked away from a £2.7bn cash bid for Mitchells & Butlers last night after being rebuffed by the pubs group for a second time earlier this week.

In a statement issued after the market had closed, Mr Tchenguiz's investment vehicle R20 cited the Takeover Panel's "put up or shut up" deadline on Monday and the decision of the pub group's board not to enter talks for its decision not to table an offer.

Mr Tchenguiz's R20, which already owns the Slug & Lettuce and Yates pub chains, first confirmed it was forming a consortium to make an approach to M&B on 13 March. But M&B shunned the 550p approach, making it clear it would not entertain any offer below 600p a share and demanding any proposal be made in writing. Faced with the prospect of taking part in a hostile bid, R20's adviser and financial backer Goldman Sachs withdrew from the consortium.

R20 hired Deutsche Bank to replace Goldman and found a new financial backer in Och-Ziff, the US hedge fund that backed Malcolm Glazer's takeover of Manchester United. Other members of the consortium looking to take equity stakes included the private equity firm Apax and Bank of Scotland.

R20 sent a new approach, in writing, to M&B on Wednesday night, making it conditional on a recommendation from the board and due diligence, but keeping the price at 550p a share. In a highly unusual move, M&B published R20's letter, marked "Strictly private & confidential" on its website as it rejected the proposal as undervaluing the business.

M&B shares closed down 16.5p at 477.5p yesterday as traders discounted the chances of a bid going ahead.

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