Analysts blast M&B as it aims for S&N estate by The PMA Team Senior analysts at investment bank WestLB Panmure have launched a devastating attack on the management record of the UK's leading managed pubco, Mitchells & Butlers, as it bids to buy Scottish & Newcastle Retail's 1,450 pubs. And they claim failure in its attempt to buy S&N Retail could leave M&B vulnerable to takeover. WestLB Panmure analysts Stuart Price and Douglas Jack argue that M&B, whose brands include All Bar One, Harvester and O'Neill's, is underperforming against its managed rivals and has a history of overpaying for acquisitions. "We estimate that a pint of standard strength bitter is 7.5% more expensive in an M&B outlet than the industry average," said Jack. "For packaged premium lager, it is 15% more expensive. M&B's pricing has been out-of-kilter with the rest of the industry for quite some time." Of the recent decision to reduce its prices year-on-year by 6% by next month, Jack said: "M&B's solution to price-discount its way out of trouble is unlikely to support the long-term momentum of the estate." Jack and Price also question the success of the acquisition of 550 pubs from Allied Domecq in 1999. The pubs were acquired for £945m or £1.72m per outlet and a further £191m has been spent on them since or £476,000 per pub. "Better returns would have accrued from investing the £1.14bn in a savings account," said Jack. WestLB advises shareholders to sell M&B shares if it is successful in acquiring S&N Retail. "Not only is there a promise of over-payment but its acquisition track record is one of value destruction," said Jack. "Given the performance of the 550 pubs M&B bought from Allied Domecq in 1999, acquiring S&N Retail could bring value destruction on a grand scale." The WestLB report was issued as a shortlist of bidders is being drawn up for S&N Retail's estate which has a book value of £2.3bn. It is believed at least nine parties submitted bids by Friday's deadline. Aside from M&B, trade bidders are believed to include Spirit, Laurel and Pubmaster. Other bidders include private equity groups CVC and Cinven, French finance house PAI Management and entrepreneurs Hugh Osmond, the Barclay brothers and Reuben brothers. The S&N board met on Tuesday with a view to publishing a shortlist of four bidders tomorrow. Media reports claim the Reuben brothers have made the highest bid, with Laurel tabling the second highest.