Mitchells & Butlers crisis explodes into open as watchdog called in

The crisis at pubs group Mitchells & Butlers erupted into open warfare today when the company complained to the City takeover panel about the behaviour of its own shareholders.

M&B believes that a group of investors, which include currency speculator Joe Lewis, are attempting to destabilise the company so that they can seize control.

Over the weekend, it emerged that Lewis's representatives on the Mitchells & Butlers board had voted against the appointment of Archie Norman as the new chairman to replace the outgoing Drummond Hall.

Lewis is thought to have been backed by racing tycoons John Magnier and JP McManus, who have 17.5% of the stock. Lewis holds 23%.

A statement from M&B today said: "The Panel on Takeovers and Mergers has been approached and a submission will be made imminently regarding the cumulative evidence that a number of shareholders have been seeking to gain control of the board and of the company to advance the interests of a small group of shareholders at the expense of others."

Lewis has two of his own men — Richard McGuire and Doug McMahon — on the board. It is assumed that they voted against Norman for fear that a strong independent chairman could hinder Lewis's attempts to take charge of a business that has been mired in controversy for several years.

Lewis acquired his stake from Robert Tchenguiz, who had pushed M&B into a disastrous property venture which ended up costing the company £500 million in write offs.

Chief executive Tim Clarke quit, to be replaced by Adam Fowle. M&B is the owner of some of Britain's best known pub chains, including All Bar One and O'Neill's.

The Takeover Panel will have to rule on whether Lewis is acting on concert with other investors.

M&B shares drifted down 1p at 252p in early trading. The company is worth around £1 billion.