The shareholders of Mitchells & Butlers (M&B), the owner of UK restaurant Harvester and pub chains All Bar One and O’Neill’s, have overhauled chairman Simon Laffin. The final act follows months of tension, but what have 66 percent of shareholders voted for?
To recap, Simon Laffin, chairman of the board since November 30, 2009, has been considered the main obstacle to an overhaul of M&B’s strategy by Piedmont, the investment vehicle of billionaire Joe Lewis. Laffin shouldered much of the blame for M&B losing £400 mn on interest rate swaps. In December, the board challenged Piedmont’s criticism of the chairman and ejected two of Lewis’ fund’s directors. Two non-executives from Elpida, the investment vehicle of Irish racing magnates JP McManus and John Magnier were also ousted and accused of colluding with Piedmont. M&B’s subsequent accusations to the Takeover Panel were rejected on January 14. A battle-weary Laffin spoke to these events in his statement yesterday, but listeners were apparently unconvinced.
Lewis may not have accounted for the transference of expectation onto his shoulders, but now his new board must act. First up, Lewis’ candidate (outgoing Debenhams chairman John Lovering) will do well to build bridges beyond Piedmont’s Hibernian connections and convince investors of the Takeover Panel’s innocent verdict. More importantly, the incoming chairman must make it clear that fighting will no longer be tolerated in the Inn-owners board room.