FOR IMMEDIATE RELEASE
17 February 2021
MITCHELLS & BUTLERS plc
LEI: 213800JHYNDNB1NS2W10
Variation to Joint Venture Arrangements relating to Ego Restaurants
Mitchells & Butlers plc (the Company) announces that its wholly-owned subsidiary, Mitchells & Butlers Retail (No 2) Limited (the Subsidiary), has reached agreement with James Horler (CEO) and the other shareholders of 3Sixty Restaurants Limited (3Sixty) to vary certain of the arrangements relating to their joint venture for the development of the Ego Restaurants business (the Ego Business). The Ego Business operates 23 Mediterranean-style family restaurants across the UK.
In August 2018, the Subsidiary acquired from an exiting shareholder a 40% stake in 3Sixty for initial cash consideration of approx. £4m. At the same time, the Subsidiary entered into a joint venture agreement with the other 3Sixty shareholders (the Majority Shareholders) for the development of the Ego Business. The joint venture arrangements involve certain of the Company's other subsidiaries leasing sites to 3Sixty (at market rents) for conversion to the Ego Restaurants brand.
Pursuant to certain put and call option arrangements entered into at the time the joint venture arrangements were put in place, the Subsidiary could acquire the remaining 60% interest in 3Sixty (the Majority Shares) from the Majority Shareholders in August 2021.
Following discussions in recent weeks, it was agreed that it was in the interests of all parties for the joint venture arrangements to continue for a further period. Subsequently, on 22 January 2021 the Subsidiary and the Majority Shareholders agreed to an extension of the joint venture arrangements and the variation of the option arrangements such that the options shall become exercisable on or after 1 April 2023. The maximum amount payable by the Subsidiary for the Majority Shares, which is to be calculated by reference to the profitability of the Ego Business in the period of 12 months prior to the date of the exercise of the relevant option, will be capped at £40m.
The value of 3Sixty's gross assets as at 31 March 2019 was £9m. For the year ended 31 March 2019, 3Sixty made an operating loss of £750k.
As at the date of this announcement, 13 sites were leased to 3Sixty pursuant to the joint venture arrangements.
For further information, please contact:
Mitchells & Butlers plc
| Tim Jones - Chief Financial Officer | +44 (0)121 498 6112 |
| Gabby Shilvock - Investor Relations | +44 (0)121 498 6514 |
Note for editors:
Mitchells & Butlers is a leading operator of managed restaurants and pubs. Its portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson's, O'Neill's and Ember Inns. In addition, it operates Innkeeper's Collection hotels in the UK and Alex restaurants and bars in Germany. Further details are available at www.mbplc.com and supporting photography can be downloaded at www.mbplc.com/imagelibrary.