Pub business takes yet another battering

Mitchells & Butlers are the owners of the pub and restaurants, Tony Carvery, All Bar One and O’Neill’s. The company has recently announced that they have experience a further decline in sales growth and this is not helping the company avoid the possibility of a takeover by the Bahamas based trader, Joe Lewis.

The company has reported that the sales growth for its food offerings has declined the most which has seen a significant decline based on the same period a year ago. The rise has dropped from near six percent to just above one percent. Drinks have also fallen, but less dramatically.

Paul Leyland is an analyst with Investec and he has commented, “This is going to affect the value of any bid that is made to takeover the company.” Altrium securities has downgraded their recommendation on the company’s stock from buy to hold.

Share in the group have fallen by a substantial 27% this year alone and the current market capitalisation of the company is at a little over £1 billion. The company released one of its most disappointing trading updates back in July and it said the disappointing figures where due to a challenging market.

The investment vehicle of Joe Lewis is called Piedmont and investors in the company are waiting to see whether Mr Lewis is going to make a bid for the company. He current owns a near 23% share in the company and earlier this year indicated his interest by giving a price he would be willing to pay for the shares. Under takeover rules by October 17th he must make a formal bid or walk away. Jeremy Blood is the CEO of the group and has said, “The reason for our disappointing performance is the poor market, our group is now significantly undervalued.