M&B: Laffin out, Lovering in
Simon Laffin has been voted out of the Mitchells & Butlers (M&B) boardroom this afternoon and will be replaced by John Lovering as chairman.
At the annual general meeting of the embattled managed pub group, which was held in Birmingham, only 34.4% voted for the reappointment of Laffin, who had been criticised by Piedmont, the investment vehicle of billionaire Joe Lewis.
Also appointed onto the board were Jeremy Blood, Michael Balfour and Simon Burke.
M&B said that following today’s poll the new board would make an announcement in due course.
The acrimonious shareholder battle at M&B started last year when Piedmont attempted to stop the appointment of Laffin.
Piedmont rejected two other candidates.
The board of M&B accused Piedmont of acting in concert with Elpida — the investment vehicle of JP McManus and John Magnier — and reported the two parties to the Takeover Panel.
Since then the board of M&B and the rebel investors have been involved in a tit-for-tat argument over the corporate governance of the group.
Earlier today shareholders heard assurances from chief executive Adam Fowle, who reiterated the firm’s strategy for growth.
Outgoing chairman Laffin said the board had to act without “fear or favour” and encouraged shareholders to follow its guide to voting rather than grant Joe Lewis’s investment vehicle Piedmont’s, which owns 22% of shares, greater board representation.
Guy Jubb, head of corporate governance at major shareholder Standard Life, criticised the actions of Piedmont. He said: “As long-standing investors we’ve been dismayed by the behaviour of Piedmont. We are far from convinced that a total overhaul of the board would be in the interests of the company and its shareholders.
“We shall support the board and urge other shareholders to follow suit.”
In a statement to the meeting, Edward Banks, a representative of Elpida, the investment vehicle of the racing tycoons, JP McManus and John Magnier, who hold 17.6%, said: “We believe that the shareholders of this company have been let down by its leadership.”
He added: “We believe that they are running a business where the cost base is too high. Revenue has increased every year for the last four years but operating profits have not.
“Notwithstanding the top line increase, operating profits and earnings per share - even ignoring all the exceptional losses - are both still below where they were in 2006. This is a business that has let costs get out of control.”
Banks said the board had “a poor track record with shareholders’ money”, citing the amont spent on a strategic review following the hedging debacle. “They blew £12m on a strategic review that achieved nothing.”
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