Mitchells & Butlers To Make Sweeping Boardroom Changes

U.K. pub group Mitchells & Butlers PLC (MAB.LN) Tuesday named senior independent director Simon Laffin as its new Chairman and said it intends to axe several directors - just one day after reports of a dramatic boardroom power struggle.

Laffin's appointment as chairman, to succeed Drummond Hall, who is retiring, follows media reports on Monday alleging that billionaire investor Joe Lewis, who owns 23% of M&B, is trying to wrest control of the boardroom and derail the pub group's search for a new chairman.

Also Tuesday, M&B said Richard McGuire of Piedmont Inc., Lewis' investment vehicle, should step down as a director. M&B said it also intends for Denis Jackson, Ray MacSharry and Douglas E McMahon to step down as directors.

M&B on Monday that it received a request for the resignation of senior independent director Laffin, "advising him that if he did not, a small number of large shareholders would vote against his election at the January 2010 Annual General Meeting."

M&B also said its nomination committee put forward three candidates for election as Chairman, "all of whom were vetoed at the final stage by a nominated representative of Piedmont who had been involved in the process from its beginning as a member of the nomination committee."

M&B owns and operates 2,000 pubs in the UK, including pub chains such as All Bar One, O'Neill's traditional Irish pubs, Crown Carveries and Harvester. Last week, it reported a net profit for the 12 months to Sept. 26 of GBP4 million, after a net loss of GBP176 million a year earlier.

At 1058 GMT, M&B shares were up 5.7% or 14 pence at 267p in a broadly higher London market.

The company's resilient 2009 performance has seen its shares gain about 67% since the turn of the year, though they're still only half the level they were two years ago.

  Company Web site: http://www.mbplc.com 
 

-By Quentin Fottrell, Dow Jones Newswires; [phone]; [e-mail]

(Vladimir Guevarra in London contributed to this story.)