Mitchells & Butlers has announced its intention to undertake an equity capital raise worth £350m.
The proposed open offer will include a facility for shareholders to apply for any shares not taken up by other shareholders, up to a maximum amount depending on their existing shareholdings in the business.
M&B has also reached agreement with its relationship banks for a new £150m three-year unsecured revolving credit facility.
The facility under the refinancing is conditional on completion of the proposed open offer.
Piedmont, Elpida and Smoothfield have informed M&B that they have come together as a concert party and consolidated their holdings under a newly incorporated holding company, Odyzean, to help address the significant capital needs and provide a clear and consistent framework for their future relationship with the company.
Odyzean has indicated its intention to make available the full amount of £350 million to be raised, to ensure that the proposed open offer will be fully subscribed in all circumstances.
Further to this, it has communicated to the company that it is fully supportive of Mitchells & Butlers’ management team.
Looking forward, Odyzean has indicated that, in order to streamline decision-making, it intends to review the composition of the Board of Directors, which may result in a reduced level of independent non-executive representation in the future.
Odyzean has also informed the company that it intends to work with the existing management team to ensure the strategy and structure of the business are appropriate to optimise its long- term success and that the time and cost devoted to public company matters are reduced.
As a result of the consolidation of the consortium’s shareholdings in the company, the Odyzean Group owns approximately 55% of the issued share capital of the company and therefore controls a majority of the votes in the Company.
Mitchells & Butlers’ lenders under its existing unsecured facilities have given their consent to the technical change of control of the company.
Bob Ivell, chairman of Mitchells & Butlers, said: “We are pleased to have received the support of our major shareholders and key creditors. Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well-known brands and operational expertise in order to win market share and continue its long- term strategy of deleveraging and driving value creation for shareholders.”