M&B pays costs to settle row with former directors
Mitchells & Butlers (M&B) has settled a long-running legal row with a number of former directors.
M&B has agreed to pay personal costs and expenses to four directors as part of the settlement of a dispute which dates back to the end of last year over the management, direction and ownership of the company.
The operator has not revealed how much it is paying, or to whom, but its statement acknowledges that it was wrong to suggest the quartet were acting against the interests of the company.
The moved follows the conclusion of the Takeover Panel's investigation into claims by M&B that certain shareholders acted in concert to effect a bid for the company.
In a statement to the Stock Exchange the managed pub operator said it now accepted that former M&B directors Denis Jackson, Ray MacSharry, Richard McGuire and Douglas McMahon "acted in what they believed to be the best interests of Mitchells & Butlers".
"We asked [law firm] Freshfields to review the relevant circumstances and we accept that the directors acted in what they believed to be the best interests of Mitchells & Butlers plc," it said.
"We would like to make it clear that nothing has come to our attention that would prevent any of these former directors from serving as credible and capable independent directors of listed companies in the future, including Mitchells & Butlers plc.
"All parties have agreed that the company's and shareholders interests are best served at this time in supporting the current board structure and its strategy.
"The company has made a payment towards the personal costs and expenses of certain of these former directors. We wish to place on record our thanks for the contribution made by each of these directors.
"We regret the manner in which their appointments came to an end and we wish them well in the future."
The four directors had been removed from M&B's board in December as relations between it and two key M&B shareholders, investment vehicles Elpida and Piedmont, soured.
A key element of the row focused on claims that certain shareholders were acting together to exert influence upon or to take over M&B, claims rejected by the Takeover Panel.
In a letter to shareholders dated December 17, 2009, M&B had explained its decision to remove the directors, saying: "It was felt by a majority of the board that the actions of these four individual directors indicated that they appeared not to be exercising judgment independently of each other, in the interests of all shareholders."
The four directors had been removed at the beginning of December. However following M&B's AGM in January M&B was forced to accept John Lovering as its new executive chairman, who was the preferred candidate of Joe Lewis, who controls Piedmont and who owns in excess of 23 per cent of M&B's shares.
In a statement MacSharry and Jackson said they were pleased at the Panel's findings and that the current board of M&B "has recognised the issues arising out of our removal as directors.
We note the board's announcement today in which it has expressed regret for the manner in which the old board sought to remove us as directors of the company, thanked us for our contribution and acknowledged it has paid us an amount towards our costs, expenses and in settlement of all and any claims between us."
The pair said that for the duration of their time as directors of M&B they acted independently, "never favouring any particular shareholder. All we sought to do was to constructively challenge the board, as is the duty of independent directors.
"The new board, in its announcement today, acknowledges that nothing has come to its attention which would prevent us from serving as credible and capable independent directors of listed companies in the future, including Mitchells & Butlers."
