Punch Taverns PLC 04 February 2008 Punch Taverns plc 4 February 2008 NOT FOR RELEASE, DISTRIBUTION OR TRANSMISSION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA PUNCH TAVERNS PLC ("Punch") STATEMENT REGARDING PRESS SPECULATION Punch notes the recent press speculation regarding Mitchells & Butlers plc (" Mitchells & Butlers"). Punch confirms that it submitted outline terms of a possible merger to the board of Mitchells & Butlers on 1 February 2008. Punch's proposal envisages a merger pursuant to which Punch and Mitchells & Butlers shareholders would each own 50% of the merged company and would therefore equally participate in the benefits of the combination. In addition, Mitchells & Butlers shareholders would receive a cash payment of £175 million. The proposal includes plans for a management and board structure for the combined company with Giles Thorley as CEO, Phil Dutton as CFO, Tim Clarke as non-executive Chairman and Peter Cawdron as non-executive Deputy Chairman. The remainder of the senior executives and board members would be drawn from both companies reflecting the expertise within Mitchells & Butlers and Punch's respective operations. Punch believes the terms and structure of the combination are compelling to both Punch and Mitchells & Butlers shareholders and that there is substantial strategic rationale in combining the two businesses, including opportunities for operational synergies in the managed pub business and through a reduction in central costs. Punch believes that its proposal is attractive in terms of value, speed and deliverability. This is an announcement falling under Rule 2.4 of the City Code on Takeovers and Mergers and does not constitute an announcement of a firm intention to make an offer or to pursue any other transaction under Rule 2.5 of the Code. Accordingly, there can be no certainty that any offer will ultimately be made. If an offer or a proposal to pursue any other transaction is made (i) Punch reserves the right to make an offer on less favourable terms with the recommendation of the board of Mitchells & Butlers and (ii) in any other case, it must be made on terms that are, taken as a whole, at least as favourable to Mitchells & Butlers shareholders as those set out in this announcement, provided that Punch reserves the right to change the form or mix of consideration. For further information, please contact: Goldman Sachs International Richard Campbell-Breeden Anthony Gutman Phil Raper (Corporate Broking) Tel: +44 20 7774 1000 Morgan Stanley & Co. Limited Gavin MacDonald Simon Smith Tim Pratelli (Corporate Broking) Tel: +44 20 7425 8000 College Hill Associates Justine Warren Matthew Smallwood Tel: +44 20 7457 2020 Brunswick Fiona Antcliffe Simon Sporborg Tel: +44 20 7404 5959 Goldman Sachs International is acting exclusively for Punch and no-one else in connection with a possible merger with Mitchells & Butlers and will not be responsible to anyone other than Punch for providing the protections afforded to clients of Goldman Sachs International nor for providing advice in relation to any such possible transaction. Morgan Stanley & Co. Limited is acting exclusively for Punch and no-one else in connection with a possible merger with Mitchells & Butlers and will not be responsible to anyone other than Punch for providing the protections afforded to clients of Morgan Stanley & Co. Limited nor for providing advice in relation to any such possible transaction. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more of any class of "relevant securities" of Punch or of Mitchells & Butlers, all "dealings" in any "relevant securities" of Punch or of Mitchells & Butlers (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by not later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which any offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Punch or Mitchells & Butlers, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Punch or of Mitchells & Butlers by Punch or Mitchells & Butlers or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction. A disclosure table, giving details of companies in whose "relevant securities" " dealings" should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel. This information is provided by RNS The company news service from the London Stock Exchange