Mitchells & Butlers considers Tchenguiz property bid

Pub company Mitchells & Butlers is giving “serious consideration” to a deal with property investor Robert Tchenguiz, it said today.

The All Bar One and O'Neill’s owner has in recent weeks revived talks with Tchenguiz through his R20 investment vehicle.

Mitchells today confirmed it had taken a £155m exceptional cost in the full year to 29 November to do with hedging in regards to this summer’s abandoned property joint-venture with Tchenguiz.

Although the sale-and-leaseback scheme was effectively killed off by the current world credit crisis, the pub group is now in advanced talks with Tchenguiz over the use of a real estate investment trust (REIT) as an alternative way of unlocking the value in its £5b property estate.

On the smoking ban the pub company said conditions in England since July were tracking Scotland with sales growth expected to slow over the winter months.

Tim Clarke, chief executive at Mitchell & Butlers, said: “Our focus on amenity, service and value has positioned us well to deliver further out-performance against the market through the first year of the smoking ban and more challenging market conditions.”

Mitchells said recent trading had proved resilient with same outlet like-for-like sales up 1.4% in the seven weeks to 17 November.

Financial highlights (Year to 29 September)

• Turnover: up 10.1% to £1.89b (2006 £1.72b)
• Pre-tax profit: £207m (2006: £208m)
• Average weekly pub sales up 6% to £18,500
• Like-for-like sales up 3%
• 107 million meals served

Punch denies £5b takeover plans for M&B >> 

Tchenguiz in talks with M&B to resurrect deal >>

Mitchells & Butlers confirms Tchenguiz joint venture >>

Pub operator Mitchells & Butlers rules out REIT conversion for now >>

By Chris Druce

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