No way to run a pub(co)

17 December 2009 By Neil Collins

The prospect of a 23 percent shareholder dictating the board composition of a big UK company has come closer with financier Joe Lewis’s assault on pubs group Mitchells & Butlers. Next month’s AGM looks set to be an odd clash between corporate governance and shareholder activism.

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The board of Mitchells & Butlers, the group which runs 2,000 pubs in the UK, has written to shareholders to explain why four directors were voted off the board on Nov. 30.

The letter was written before an announcement on Dec. 16 from an investment vehicle controlled by Bahamasbased billionaire Joe Lewis, that it was proposing four new directors for election at the forthcoming AGM.

In response, the M&B board invited the four to meet its external head hunters and the nomination committee.

Earlier, the board had asked the UK Takeover Panel to investigate evidence of collusion between the largest shareholders sufficient to class them as a concert party, treating the holdings as one for the purpose of the Takeover Code.

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