According to a statement from 6C, the company turned down the bid because it was seen as "not sufficiently attractive" in the context of other expressions of interest from a range of venture capitalists.
Mitchells & Butlers has an estate of more than 2,000 pubs and restaurants, including the All Bar One, O'Neill's and Harvester chains. But Six Continents plans to hive off the division from the rest of the group in order to focus on its 3,000 hotels which include the Holiday Inn, Inter-Continental and Crowne Plaza chains, a strategy endorsed by shareholders earlier this month.
Six Continents believes it is difficult to place a realistic value on Mitchells & Butlers before it is listed on the stock market as a separate company next month. But analysts estimate it to be worth about £3 billion ($4.7 billion) and broadly back the decision of Six Continents to turn down the offer.
A company statement released yesterday added: "The offer is not considered sufficiently attractive and therefore cannot be recommended to shareholders." The approach was subject to due diligence and a committee set up to advise the board on such proposals recommended it be turned down. The board unanimously agreed.
Six Continents, which recently defeated a takeover bid for the whole group from leisure tycoon Hugh Osmond, has spent the last month convincing shareholders of the merits of a split as delivering maximum value. Once the demerged companies are listed, Six Continents is expected to attract a range of offers from Osmond as well as the hotel chains like the Hilton Group and venture capitalists like CVC Capital Partners.
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