Mitchells & Butlers's shareholders pocket £519m after refinancing deal

Shareholders in Mitchells & Butlers have raised their glasses as the owner of All Bar One, Harvester and Vintage Inns has announced it is returning £519m to them after agreeing a refinancing deal.

The complex financial agreement, which sent shares in the chain sharply upwards, saw M&B's pub estate revalued at £5.5b and its securitised estate, or pubs being used as security against borrowing, now estimated to be worth £4.8b.

The average value per securitised pub had now risen some 40% on its 2003 calculations, to £2.8m, it said.

This increase meant the company was able to return £1 a share back to shareholders in a special dividend, equating to £486m.

With £33m already returned to shareholders since the half year, this meant shareholders would be getting back £519m in total, said M&B.

City analysts said the move was an indication of M&B's financial strength, with Simon French at Numis Securities describing the chain as "the pre-eminent pub retailer in the UK".

The focus within the City would now shift to how successfully M&B integrated the 239 Whitbread pub restaurants it bought for £500m in July, added French, plus whether it could continue to improve its own pubs.

It recently sold 21 smaller freehold properties in London for £53m, and had disposed of assets worth £88m in total during the year to date. Talks on disposing 100 smaller, drink-led pubs, announced last month, were ongoing, it added.

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By Nic Paton

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