Bid for M&B may lift Tchenguiz’s spirit

Property tycoon Robert Tchenguiz confirmed this month that he is in discussions about a bid for UK pub chain Mitchells & Butlers.

Property tycoon Robert Tchenguiz confirmed this month that he is in discussions about a bid for UK pub chain Mitchells & Butlers.

He has a history of pub business takeovers, having previously bought SFI, Laurel, Globe and Yates. The chairman of Laurel, Ian Payne, has worked on the M&B estate when it was part of Bass.

Tchenguiz is reportedly in talks with a number of parties about forming a consortium to buy M&B but R20, Tchenguiz’s investment vehicle, has said there is no certainty an offer would be made.

The reports immediately caused shares in M&B to rise by 19%, reaching 490p at their highest level, valuing the operator at £2.4bn. City analysts believe any initial offer from R20 would be between £5 and £5.10 per share.

M&B has about 2,000 pubs in the UK with 1,500 of them freeholds, which would make them of interest to the Iranian property baron.

There has been some surprise expressed in the industry at the reports, however, as M&B had been seen as a more likely buyer of pub assets than one vulnerable to a takeover.

A report in the Financial Times quoted one industry expert as saying: “M&B is now the biggest jewel in the industry after the sale of Spirit last year.” In December 2005, Tchenguiz lost out to Punch Taverns in a £2.7bn battle for the Spirit pub group. db  April 2006