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Mitchells & Butlers PLC (MAB)

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Dod101
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Re: Mitchells & Butlers PLC (MAB)

#386804

Postby Dod101 » February 15th, 2021, 8:32 am

I am not a shareholder but it sounds as if existing shareholders are once again being diluted by a placing although it seems that will be allowed to take the crumbs from the table if any shares are left over.

Dod

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Re: Mitchells & Butlers PLC (MAB)

#386808

Postby daveh » February 15th, 2021, 8:56 am

Dod101 wrote:I am not a shareholder but it sounds as if existing shareholders are once again being diluted by a placing although it seems that will be allowed to take the crumbs from the table if any shares are left over.

Dod

I am a share holder (very small as its a left over holding from Six Continents). The open offer shares are being offered at a significant discount to the share price last week, but I don't think it will lead to anything for small holders like me unlike with a rights issue. I should probably sell as its such a small holding - but they hand out vouchers that give 20% off the bill in there restaurants and have in the past used them to get more money off a bill than the shareholding is worth.

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Re: Mitchells & Butlers PLC (MAB)

#386811

Postby Dod101 » February 15th, 2021, 9:11 am

daveh wrote:
Dod101 wrote:I am not a shareholder but it sounds as if existing shareholders are once again being diluted by a placing although it seems that will be allowed to take the crumbs from the table if any shares are left over.

Dod

I am a share holder (very small as its a left over holding from Six Continents). The open offer shares are being offered at a significant discount to the share price last week, but I don't think it will lead to anything for small holders like me unlike with a rights issue. I should probably sell as its such a small holding - but they hand out vouchers that give 20% off the bill in there restaurants and have in the past used them to get more money off a bill than the shareholding is worth.


Many years ago P & O used to do much the same with special shares to give discounts off Channel Crossings. Anyway M & B are not by any means alone in raising funds this way. It is quicker and cheaper than a normal rights issue.

Dod

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Re: Mitchells & Butlers PLC (MAB)

#386818

Postby scrumpyjack » February 15th, 2021, 9:29 am

As I read it, it is a 'fully pre-emptive' open offer, whereby shareholders can apply for shares in proportion to their existing holdings, but will not get tradeable nil paid rights.

So the normal preemption rights are not being ignored but neither is it a conventional rights issue.

The 3 entities who own 55% of MAB are putting their shares into a single company which will control MAB and fully underwrites the whole issue.

I don't hold MAB but it is an unusual situation as this ownership must ensure MAB will not go under but leaves other shareholders with no control of what happens in future to the company.

I am not a holder.

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Re: Mitchells & Butlers PLC (MAB)

#386819

Postby dealtn » February 15th, 2021, 9:33 am

Dod101 wrote:I am not a shareholder but it sounds as if existing shareholders are once again being diluted by a placing although it seems that will be allowed to take the crumbs from the table if any shares are left over.

Dod


It isn't a placing. It's an Open Offer.

Share Holders are only diluted if they choose to be. They have the ability to take up the offer, the same as other shareholders. Like others, they can additionally elect to apply for more shares should others not take up the offer.

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Re: Mitchells & Butlers PLC (MAB)

#386828

Postby Dod101 » February 15th, 2021, 9:50 am

Interesting so I now find that I do not understand the difference between an Open Offer and a Rights Issue. Can someone elucidate please?

Dod

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Re: Mitchells & Butlers PLC (MAB)

#386840

Postby dealtn » February 15th, 2021, 10:22 am

Dod101 wrote:Interesting so I now find that I do not understand the difference between an Open Offer and a Rights Issue. Can someone elucidate please?

Dod


An open offer is open to all shareholders, just like a Rights Issue, but the "right" to participate isn't transferable or sellable in the market to non-shareholders. Those not wishing to participate don't take part and those shares will be purchased by the underwriter. The underwriter is typically either a significant shareholder, or the investment bank adviser.

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Re: Mitchells & Butlers PLC (MAB)

#386850

Postby Breelander » February 15th, 2021, 10:38 am

dealtn wrote:
Dod101 wrote:Interesting so I now find that I do not understand the difference between an Open Offer and a Rights Issue. Can someone elucidate please?

Dod


An open offer is open to all shareholders, just like a Rights Issue, but the "right" to participate isn't transferable or sellable in the market to non-shareholders....


yes...

Those not wishing to participate don't take part and those shares will be purchased by the underwriter....


Unlike a Rights Issue, in an Open Offer shareholders are allowed to apply for more shares than the guaranteed number they are offered.

...If any shareholder declines his minimal entitlement, the excess shares are allocated to those applying for shares in excess of their minimum entitlements. If excess applications cannot be met in full, applications are scaled down.
uk.practicallaw.thomsonreuters.com - Open Offer

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Re: Mitchells & Butlers PLC (MAB)

#386885

Postby Dod101 » February 15th, 2021, 12:14 pm

I see, thanks to both, but then you need to explain in what circumstances it is beneficial to a company to go by the Open Offer route rather than a Rights Issue or vice versa. It looks, since both are underwritten, that the company gets its money either way.

I do not think I have ever come across as Open Offer with any company that I have held.

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Re: Mitchells & Butlers PLC (MAB)

#386897

Postby scrumpyjack » February 15th, 2021, 12:54 pm

I think what is different here is that 55% of MAB is owned by 3 companies who together have decided they will buy all the new sharers if necessary. So they underwrite it themselves and don't use investment bank underwriters.

An open offer means other shareholders can take up their proportion of the offer and then the 55% owners can mop up as many as the outside shareholders don't want.

This will all be a lot cheaper than paying investment bank underwriting fees and enables the 55% owners to buy more shares without having to buy other shareholders' 'rights'

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Re: Mitchells & Butlers PLC (MAB)

#386914

Postby daveh » February 15th, 2021, 1:30 pm

scrumpyjack wrote:I think what is different here is that 55% of MAB is owned by 3 companies who together have decided they will buy all the new sharers if necessary. So they underwrite it themselves and don't use investment bank underwriters.

An open offer means other shareholders can take up their proportion of the offer and then the 55% owners can mop up as many as the outside shareholders don't want.

This will all be a lot cheaper than paying investment bank underwriting fees and enables the 55% owners to buy more shares without having to buy other shareholders' 'rights'


As my shareholding is so small I may take up the open offer as it won't be a lot of cash ( i haven't worked out how many shares yet), and it is the only way not to lose the discount available on the new shares. If it had been a rights issue I'd have let the rights lapse. If my holding was larger I'm not sure what I would do. Take up the open offer and then sell afterwards hoping to profit due to the discount, or just let them lapse for no payment and not take the risk of a loss.

It will be interesting to see what the consortium do after the open offer. There is a good possibility with them mopping up any unwanted open offer shares that their holding will increase above the 55% they already own. They clearly see a future/profit in the company, I wonder if they will make an offer for the whole company down the line?

Edit to add:

Just been on the London Stockmarket site and the market cap is £1,400m so I make that about a 1 for 4 offer. I also notice the share price is up 7% today, so the market likes the deal.

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Re: Mitchells & Butlers PLC (MAB)

#386927

Postby Dod101 » February 15th, 2021, 2:14 pm

scrumpyjack wrote:I think what is different here is that 55% of MAB is owned by 3 companies who together have decided they will buy all the new sharers if necessary. So they underwrite it themselves and don't use investment bank underwriters.

An open offer means other shareholders can take up their proportion of the offer and then the 55% owners can mop up as many as the outside shareholders don't want.

This will all be a lot cheaper than paying investment bank underwriting fees and enables the 55% owners to buy more shares without having to buy other shareholders' 'rights'


That makes sense in this particular case, thanks. As daveh has hinted, it may increase the combined shareholding of what is now close to a consortium and unless they get a waiver they might be required to make an offer for the rest of the shares anyway?

Dod

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Re: Mitchells & Butlers PLC (MAB)

#386930

Postby daveh » February 15th, 2021, 2:19 pm

Dod101 wrote:
scrumpyjack wrote:I think what is different here is that 55% of MAB is owned by 3 companies who together have decided they will buy all the new sharers if necessary. So they underwrite it themselves and don't use investment bank underwriters.

An open offer means other shareholders can take up their proportion of the offer and then the 55% owners can mop up as many as the outside shareholders don't want.

This will all be a lot cheaper than paying investment bank underwriting fees and enables the 55% owners to buy more shares without having to buy other shareholders' 'rights'


That makes sense in this particular case, thanks. As daveh has hinted, it may increase the combined shareholding of what is now close to a consortium and unless they get a waiver they might be required to make an offer for the rest of the shares anyway?

Dod


They've already got a waiver:

The Takeover Panel, having sought the views of the Company and its advisers, has confirmed to the Company and the Consortium that the coming together of the Consortium under the structure described above carries no consequences under Rule 9 of the Takeover Code and no mandatory offer will be required to be made. As the Odyzean Group holds shares carrying more than 50% of the voting rights of the Company, the Odyzean Group is free to acquire additional shares, in the Proposed Open Offer or otherwise, without a mandatory offer being required to be made.


I was wondering if having already procured such a large holding in MAb they might want to make a full takeover in the near future.

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Re: Mitchells & Butlers PLC (MAB)

#386932

Postby scrumpyjack » February 15th, 2021, 2:20 pm

Dod101 wrote:
scrumpyjack wrote:I think what is different here is that 55% of MAB is owned by 3 companies who together have decided they will buy all the new sharers if necessary. So they underwrite it themselves and don't use investment bank underwriters.

An open offer means other shareholders can take up their proportion of the offer and then the 55% owners can mop up as many as the outside shareholders don't want.

This will all be a lot cheaper than paying investment bank underwriting fees and enables the 55% owners to buy more shares without having to buy other shareholders' 'rights'


That makes sense in this particular case, thanks. As daveh has hinted, it may increase the combined shareholding of what is now close to a consortium and unless they get a waiver they might be required to make an offer for the rest of the shares anyway?

Dod


They have had a waiver of the takeover rules from the Stock Exchange, per today's announcement. Some newspapers are describing it as effectively a nil premium takeover.

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Re: Mitchells & Butlers PLC (MAB)

#386936

Postby Dod101 » February 15th, 2021, 2:37 pm

Thanks to both. I daresay I should have looked more closely at all of this and could have found out for myself but it now all makes sense. In due course the consortium might well seek to buy out the minorities but it seems they have control anyway.

Dod

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Re: Mitchells & Butlers PLC (MAB)

#388624

Postby daveh » February 22nd, 2021, 9:18 am

Details of open offer here:
https://www.investegate.co.uk/mitchells ... 00078117P/

Pursuant to the Open Offer, the Company is proposing to offer New Shares to all Qualifying Shareholders at a price of 210 pence per share on the basis of 7 New Shares for every 18 Existing Shares


and the operational update is here:
https://www.investegate.co.uk/mitchells ... 00078110P/

Operational Update

Since the UK Government announcement on 30 December 2020, which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group's sites have been open. All of the Group's German businesses were closed at the start of November 2020.

In the period from 27 September 2020 to 16 January 2021, total managed sales were 69.8 per cent. below the prior year. On a like-for-like basis (for sites when open, excluding periods of closure) trading was 30.1 per cent. down on the prior year across this period.


Cash and Balance Sheet

The Group had a cash balance of £113 million as at 16 January 2021 with all facilities drawn.

Agreement has been reached with the trustee of the Group's pension funds to delay monthly contributions from January to March 2021, inclusive, with these becoming due in April 2021.

Taking this into account, since the start of the year, during which time the Group's estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also has securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non-essential capital expenditure continues to be suspended.

The next quarter payment date for debt service is 15 March 2021.



Looks like the end of lockdown and opening of pubs and restaurants can't come to soon for M&B

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Re: Mitchells & Butlers PLC (MAB)

#388627

Postby scrumpyjack » February 22nd, 2021, 9:28 am

It may all come good in a few years but they have clearly sailed pretty close to insolvency and desperately need the cash.

Reminds me of the flotation of Mirror Group Newspapers by Robert Maxwell. The media analyst at UBS Phillips & Drew, issued a "Can't Recommend A Purchase" broker note on it. Maxwell was so angry he got the analyst fired!

Not suggesting for a moment that MAB is anything like that, and punters may be getting in at a low point.

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Re: Mitchells & Butlers PLC (MAB)

#389599

Postby Bouleversee » February 24th, 2021, 3:46 pm

I also have a small holding, 31% smaller in value than when I bought several years ago. I suppose it makes sense to shell out another few hundred so as not to be diluted. Is there any case for applying for more? I have been in a similar situation before; I think it might have been with Accesso Technology where excess applications were scaled back. I'm still losing on those, too, but the loss is gradually diminishing.

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Re: Mitchells & Butlers PLC (MAB)

#394554

Postby daveh » March 11th, 2021, 11:17 am

Results of open offer:
https://www.investegate.co.uk/mitchells ... 00118822R/

The Company is pleased to announce the results of the Open Offer, which closed for acceptances at 11.00 a.m. on 10 March 2021.

The Company has received valid acceptances from Qualifying Shareholders under their basic Open Offer Entitlements in respect of 153,400,408 New Shares, representing approximately 91.9 per cent. of the 166,911,444 New Shares available pursuant to the Open Offer (following any fractional entitlements being discarded). In addition, the Company has received applications from Qualifying Shareholders under the Excess Application Facility in respect of 96,033,311 New Shares.

Accordingly, a total of 166,911,444 New Shares will be issued at the Offer Price and allocated to Qualifying Shareholders under the Open Offer. As such, the gross proceeds of the Open Offer have been calculated to be £350,514,032.40.



So the company has got the money they requested (subject to EGM approval). Lets hope that they can get back in business sooner rather than later and the company can start making money again.

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Re: Mitchells & Butlers PLC (MAB)

#394817

Postby daveh » March 12th, 2021, 8:23 am

and now the new shares have been admitted to the stock exchange and started trading today:
https://www.investegate.co.uk/mitchells ... 00040272S/


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