UK pub operator Mitchells & Butlers anounced on Monday that it will raise £350 million in equity from its largest shareholders by the proposed open offer.
Mitchells & Butlers said the proposed open offer is fully supported by the company’s major shareholders, Piedmont Inc., Elpida Group Limited, and Smoothfield Holding Ltd., who collectively hold approximately 55% of the issued share capital of the company.
The company said Piedmont, Elpida and Smoothfield have consolidated their holdings under a newly incorporated holding company in the pub operator, Odyzean Limited, in order to help address the significant capital needs of Mitchells & Butlers.
Under the proposed open offer, the company will issue approximately 167 million new ordinary shares. The subscription price of 210 pence per share represents a 36% discount to the company’s closing share price on 12 February 2021.
“We are pleased to have received the support of our major shareholders and key creditors. Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market share and continue its long-term strategy of deleveraging and driving value creation for shareholders,” said Bob Ivell, Chairman of Mitchells & Butlers.
The company has also reached agreement with its relationship banks for a new £150 million 3 year unsecured revolving credit facility. The facility under the Refinancing is conditional on completion of the proposed open offer.