Newspaper article The Evening Standard (London, England)

Mitchells & Butlers in a Froth on New Bid Talk; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Mitchells & Butlers in a Froth on New Bid Talk; MARKET REPORT

Article excerpt


SHARES in pubs chain operator Mitchells & Butlers were riding high today, propelled by talk that another bid for the company may be on the way.

They stood out among secondliners with a jump of 283/4p to a record high of 5531/4p amid talk of stakebuilding in the shares. Brokers say spread-betting bookie Cantor Fitzgerald has been behind the buying.

Word is it has a client on board who has been building-up a stake in the shares via contracts for difference.

CFDs would enable him to acquire the stake cheaply in a leveraged manner and retain anonymity.

Cantor is now being forced back into the cash market to cover its position and that has driven up the price.

City speculators say the buyer could be property developer Robert Tchenguiz, whose offer of 550p a share, valuing M&B at [pounds sterling]4.4 billion, was rejected in May.

He subsequently built-up an 8% stake for which he paid around 470p a share.

He later announced that he had reduced the holding below the disclosable 3% level, although some speculators claim he has merely moved it from a nominee account to CFD's. This would allow him to hold almost 6% of the company in two separate accounts without even being identified.

Brokers say Mitchells & Butlers still represents good value for money.

Just last month M&B bought a chain of 239 pub restaurants for [pounds sterling]497 million from Whitbread, 1p firmer at 1215p, and is now thought to be carrying out a revaluation of its pubs portfolio, which it is estimated could be worth more than 500p a share.

Broker Investec calculated recently that if the company was to split itself in two, with one half owning the pubs and the other half managing them, it could value the business at nearer 640p a share.

Investors elsewhere managed to steady the ship in the wake of yesterday's interest rate-inspired selloff. Gains overnight on Wall Street provided a useful springboard, but the US employment payroll numbers later today will provide a stern test for investors. The FTSE 100 index rose 11.9 to 5850.3 in another thin day of trading.

Bumper profits lifted gold miner Anglo American 114p to 2337p. …

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