Mitchells & Butlers PLC 09 October 2003 NOT FOR DISTRIBUTION IN THE UNITED STATES MITCHELLS & BUTLERS PLC REFINANCING & RETURN OF FUNDS Mitchells & Butlers today announces that it is commencing the marketing of a £1.9bn securitisation of its UK pubs and pub restaurants business. Subject to the successful conclusion of the proposed securitisation, Mitchells & Butlers intends to return £500m to shareholders by way of a special dividend of 68 pence per share. This return will be accompanied by a proportionate consolidation of the number of shares in issue. The net proceeds raised from the securitisation will also be used to repay the Group's existing borrowings, to fund additional pension contributions and to provide working capital headroom for the Group. Commenting on the return of funds, Tim Clarke, Chief Executive said: "Earlier this year we set out to restructure the balance sheet with a target of releasing at least £400m of surplus funds to shareholders. We are able to confirm today, with the announcement of the securitisation, that we now plan to exceed that target." "This is a further step towards delivering the priorities we set out for the business at de-merger which were to focus on like for like sales and profit growth, drive cashflow and returns and refinance the business consistent with a long term equity growth strategy." Commenting on the refinancing Karim Naffah, Finance Director said: "We believe we have designed the optimal financial structure to support our long term strategy of owning and developing high take, high quality, managed pubs in prime locations. Our proposed securitisation provides appropriate flexibility to deliver a progressive dividend policy and continue to develop and reposition the estate over time, in the interests of our shareholders and prospective bond holders." Timetable In conjunction with The Royal Bank of Scotland and Citigroup as joint Lead Managers, we will be marketing to potential investors over the coming weeks. Subject to conditions in the debt markets, it is expected that the securitisation will be completed in November. Following the successful close of the securitisation a circular will be posted to shareholders with full details of the proposed return of funds. A further announcement will be made at that time. The bonds will be marketed based on earnings before interest, tax, depreciation and amortisation (EBITDA) to the end of the third quarter (5 July 2003). In the 12 months to this date, Mitchells & Butlers plc generated EBITDA of £373m reflecting the strong cashflows of the estate. For further information please contact: Investor Relations Kate Holligon 0121 498 5092 Media Jeremy Probert 0121 498 5547 Finsbury Group - James Murgatroyd 020 7251 3801 There will be a conference call for analysts and fund managers outside the United States at 9.30am. Details of the call are posted on the Mitchells & Butlers website: mbplc.com. The replay will be available to persons outside the United States for one week. Cautionary note regarding forward-looking statements This update contains certain forward-looking statements as defined under US law (Section 21E of the Securities Exchange Act of 1934). These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "target", "expect", "intend", "believe" or other words of similar meaning. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty. There are a number of factors that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Factors that could affect the business and the financial results are described in Item 3 Key Information - Risk Factors in the Mitchells & Butlers plc Form 20-F filed with the United States Securities and Exchange Commission on 28 March 2003. This document is not an offer of securities for sale in the United States. The securities referred to herein may not be offered or sold in the United States or to or for the account of benefit of US persons (as such terms are defined in Regulation S under the US Securities Act of 1933) unless registered under the Securities Act or pursuant to an exemption from such registration. There will be no public offer of the securities in the United States. -ends- This information is provided by RNS The company news service from the London Stock Exchange