Mitchells & Butlers "not engaged" in process claim
Well-placed industry sources are suggesting concerns by Punch Taverns about the pension deficit at Mitchells & Butlers (M&B), its cash position and a lack of engagement by management are behind Punch's decision to withdraw its merger proposal.
One observer said: "Others have walked away as well and there is a feeling that M&B management has been going through the motions.
"The process have been going on for two months and what is there to show for it?
"No-one doubts that M&B is a good company but it is quite widely believed to be short of cash and that the management has not engaged in the sale process."
Last week, M&B took the rare step of denying a series of share price-weakening claims in an analyst's note.
The company, whose shares slid 18% at one stage on the morning of the release of the Lehman note, denied that capital investment would need to be cut to retain the dividend payment and that the company could require a capital injection.
A statement from M&B said: "These comments are without any basis and Mitchells & Butlers categorically refutes these suggestions.
"The group has borrowing facilities to meet all of its financial requirements.
"The company has no requirement for any capital injection to meet its existing funding needs."
