2 March 2021
British pubs have been part of history for centuries, and are now a thriving export to every far flung corner of the globe. More than 50% of the adult population in Britain frequents a pub regularly - and it is no doubt the potential of this bankability that attracted a group of super-rich tycoons based in the Caribbean to Britain’s biggest listed pub chain.
Mitchells & Butlers, which owns the Harvester, Toby Carvery and All Bar One chains, unveiled plans to raise £350m in new equity in a bid to see out the pandemic. The funds will be fully underwritten by three of the group’s largest shareholders: Joe Lewis, owner of Premier League football club Tottenham Hotspur, currency trader Derrick Smith and investment group Elpida, backed by Irish horse racing magnates John Magnier and JP McManus. Magnier, McManus and Smith have strong racing tires through the Coolmore Stud in County Tipperary, which has produced some of the world’s best racing horses.
Creating a new entity called Odyzean, the group of tycoons have also pooled their 55 percent combined interests, effectively putting them in control of the company. The group of friends and associates is known as the ‘Sandy Lane set’ because of their links to the exclusive Barbados hotel, a favorite haunt of celebrities such as Joan Collins, Mick Jagger, Simon Cowell and Tiger Woods.
Mitchells and Butlers faced a bleak outlook with major capital injection, with each of its 1,600 locations and more than 40,000 UK employees uncertain. As part of the take-over, the group has pledged to review the company’s business strategy and reduce the number of non-executive directors on the board.
M&B offers a subscription price of 210p per share, which equated to a 36 percent discount on the closing share price on February 12th.The Odyzean consortium will make up for the full £ 350 million if other shareholders don’t participate. M&B also agreed a new £ 150 million loan with its banks.
The investors have a criss-cross business interests in pubs, football, horse racing and care homes going back decades.
Joe Lewis, 84, has a 27 percent stake in M&B and is the majority shareholder of Tottenham Hotspur. Born over a pub in London’s East End, he has an estimated net worth of £ 3.9 billion after making a fortune in currency trading.
Derrick Smith started his career as a bookmaker at Ladbrokes before switching to currency trading. He spends much of his time in Albany, a 600-acre luxury resort in the Bahamas that he owns with golfers Tiger Woods and Ernie Els and pop star Justin Timberlake. The tycoon, whose 210 ft superyacht Callisto is worth £ 50 million, owns the Sandy Lane hotel with Magnier and McManus. He owns a 4.4 percent stake in M&B through its Smoothfield vehicle, while Magnier and McManus have 23.5 percent through Elpida.
The pub industry in the United Kingdom had a total estimated turnover over 22 billion British pounds. Managed, branded and franchised pubs generate the highest revenue, compared to independent, tenanted and leased premises. The UK pub industry is forcast to grow in value by 2021.
