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Strategic Review Update

Following the recent press comment, Mitchells & Butlers announces an update to the strategic review, which is due to be completed by the interim results.

Since the announcement on 29 January 2008 stating that Mitchells & Butlers was initiating a strategic review, the Board has been actively engaged in discussions to explore ways of creating value for shareholders.  As part of this process, the Board has received a number of preliminary proposals from private equity investors to take a minority interest in Mitchells & Butlers at a material premium to the current share price.

The Board believes that significant value through enhanced sales and profitability can be created by integrating Punch's managed pub business into Mitchells & Butlers operational and brand structure.  The Board has now initiated an approach to Punch to explore whether terms for such a mutually beneficial transaction can be agreed.

The Board is actively considering how such an acquisition of Punch's managed pub business could be best funded.  One form of funding being considered is the basis on which the private equity investors, who support Mitchells & Butlers strategy of consolidation, might invest in the Company.  Any transaction structure and financing will be assessed by the Board in the light of creating value for all existing shareholders and will be subject to any necessary shareholder approvals.

On 9 April 2008, Mitchells & Butlers reported resilient sales growth and robust operating profits performance together with strong operational cash generation for the first 27 weeks of the financial year. The Company has no requirement for any capital injection to meet its existing funding needs.

The Board is seeking to clarify the proposals from all interested parties prior to the conclusion of the review.  All the discussions are at a preliminary stage and subject to further due diligence and negotiation.  There can therefore be no certainty that any transaction will be concluded.

For further information, please contact:

Investor Relations: 
Erik Castenskiold                                         0121 498 6513

Kathryn Holland                                           0121 498 4526
James Murgatroyd (Finsbury Group)              0207 251 3801

Notes for editors:

  • Mitchells & Butlers owns and operates around 2,000 high quality pubs in prime locations nationwide. The Group's predominantly freehold, managed estate is biased towards large pubs in residential locations. With around 3% of the pubs in the UK, Mitchells & Butlers has 10% of industry sales and average weekly sales per pub over three times greater than that of the average UK pub.
  • Mitchells & Butlers' leading portfolio of brands and formats includes Ember Inns, Harvester, Sizzling Pub Co., Toby Carvery, Vintage Inns, All Bar One, O'Neill's, Nicholson's and Browns. In addition, Mitchells & Butlers operates a large number of individual city centre and residential pubs.

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