Mitchells & Butlers confirms Tchenguiz joint venture

Mitchells & Butlers today confirmed it was planning to press on with its proposed £4.5b property joint venture with investor Robert Tchenguiz despite already losing £140m on the deal. 

The O’Neill’s and All Bar One owner was forced to postpone the deal – which proposed moving 1,300 of its pubs into a new property company jointly owned by Tchenguiz - in August because of uncertainty in the financial markets.

The delay meant losses from hedging the deal more than doubled from £60m to £140m.

However, announcing a trading statement today, chief executive Tim Clarke said: “We continue to believe that significant value can be released to shareholders through creating a dedicated property company structure and we continue to have discussions to implement a transaction as and when the credit markets stabilise.”

The statement, released ahead of full-year results in November, revealed that like-for-like sales were up 3.2% in the 50 weeks to 15 September, with demand for food particularly strong. 

Since the English smoking ban was implemented in July, like-for-like sales in pubs that had not already banned lighting up were up 2.2%. 

However, Clarke warned that future performance was likely to be impacted by a fall in consumer spending and rises in food and wage costs.

Mitchells & Butlers' debt grows as deal with Robert Tchenguiz is delayed >> 

Robert Tchenguiz raises stake in Mitchells & Butlers >>

Mitchells & Butlers confirms property deal speculation >> 

By Daniel Thomas

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