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Leading investors in Mitchells & Butlers have hit out at potential bidder Joe Lewis for destabilising the pub company and are calling for greater powers to be given to the Takeover Panel to protect shareholders.
'You are not in a very comfortable position if you are a small shareholder,' said one. 'The question is when will he make a formal bid and if so at what price? Smaller shareholders are holding their breath to find out what this means and it is incredibly difficult for them.'
Lewis has been given until October 17 to make a formal bid for M&B or walk away. The billionaire, who owns 22.8 per cent of the group behind brands such as All Bar One, Browns, Vintage Inns and Harvester, has made informal proposals at 224p and 230p a share. Both have been rejected by the board as 'derisory'.




Potential bidder: Joe Lewis has made informal proposals for M&B at 224p and 230p a share

However, Lewis, 74, is expected to
increase his offer in the next few weeks and is also expected to talk
to Irish businessmen JP McManus and John Magnier, who own 20.1 per cent
of M&B through their Elpida investment vehicle.
Sources close to Lewis denied any
hint that the trio had discussed a takeover of M&B. 'We were pulled
through the mud before and we know that people will be watching our
every move, so we have to be extra careful, open and transparent,' said
one.
 



A messy start to Mitchells & Butlers talks over billionaire Joe Lewis's bid


However, there is now talk that the
idea of a done deal between Lewis and Elpida is wide of the mark. The
Irish pair are understood to have bought into the firm at an average of
350p a share and are said to be unwilling to realise losses.
Lewis is also understood to be
setting up a meeting in the next few days with interim chairman Bob
Ivell and chief executive Jeremy Blood.
Institutional investors told
Financial Mail the Lewis bid was a 'crystallising' of the battle more
than 18 months ago when the Takeover Panel was called in to investigate
- and ultimately discount - claims that Lewis was acting in concert
with Elpida to take control.
M&B had only just begun to
recover from a disastrous two years when it racked up £500million in
losses from financial hedging arrangements with tycoon Robert Tchenguiz
that led to the departure of chief executive Tim Clarke and finance
director Karim Naffah. The rift between the board and Lewis even
prompted an Early Day Motion.
Now there are fears that the firm
could be bought cheaply by a man who has admitted that he was merely an
opportunistic buyer in 2008 when he snapped up Tchenguiz's stake.
'It's a bit of a bad outcome for a
major British company,' said one source. 'It might end up being bought
cheaply by people with too many calculators. The Takeover Panel should
be given more powers to regulate this kind of behaviour.'
Lewis, who grew up in the East End of London, is currently living on his super-yacht moored near Tower Bridge.

Meanwhile, on Tuesday the Business
Select Committee will issue its report into the beer tie - where
tenants have to buy their beer from their pub landlords.