Punch’s proposed acquisition of M&B would create the UK’s biggest pub group.

Punch Taverns has reacted to press speculation and confirmed Monday it has made an offer to take over struggling rival Mitchells & Butlers (M&B). The deal would create the UK’s biggest pub operator.

Punch said under its proposal shareholders in each of the two companies would own 50% of the merged company. Mitchells & Butlers shareholders would also receive a cash payment of £175 million.

The proposal includes plans for a management and board structure for the
combined company. This would see Giles Thorley take the position of CEO, Phil Dutton as Chief Financial Officer, Tim Clarke as Non-Executive Chairman and Peter Cawdron as Non-Executive Deputy Chairman. The remainder of the senior executives and board members would be drawn from both organisations.

The reshuffle would mean Roger Carr, M&B’s Chairman would leave the group. Carr has come under criticism recently over M&B’s £274 million loss, closing hedges related to a failed property transaction.

Punch said it believes the merger will provide “opportunities for operational synergies in the managed pub business and through a reduction in central costs”, adding that it views the proposal to be “attractive in terms of value, speed and deliverability.”

Other companies believed to have expressed an interest in M&B include Blackstone, CVC Capital Partners and TPG.

By Natasha Piscitelli