Private equity firms CVC Capital Partners and Blackstone have made a joint bid to buy a 29.9 percent stake in restaurant and pub firm Mitchells & Butlers, according to various reports.
Sources close to the deal told the Times newspaper that Permira has made a similar offer, and that Bain Capital may also seek to purchase a stake in the company. The firms declined to comment.
The news comes a week after rival pub operator Punch Taverns withdrew its February proposal for an £11 billion merger between the companies. That merger would have created Britain’s largest pubs operator.
Mitchells & Butlers is undergoing a strategic review after reporting losses of £422 million ($840 million, €565 million) in February due to its failure to close a lucrative property deal last year. Property entrepreneur Robert Tchenguiz, who was involved in the property deal attempt last year that caused the company’s losses, increased his stake in the company in February from 23 percent to 29.9 percent.
The interest is Mitchells & Butlers also comes at a time when the UK smoking ban, fears of downturn in the economy and the availability of cheap alcohol in supermarkets, are conspiring to damage pub operators.
Recent research says almost four pubs a day are closing in the UK, and there is growing speculation that more and more small lessee operators will have to sell or close in the coming year.
In addition to Blackstone and CVC, Apax Parnters and Cinven are also said to be circling Mitchells & Butlers.