SLI's Cumming blasts Piedmont's 'derisory' M&B bid

Standard Life Investments' (SLI) David Cumming has hit out at Piedmont, accusing the investment vehicle of destabilising the Mitchells & Butlers (M&B) board before submitting a 'derisory' bid offer to the pub group.

Cumming, SLI's head of UK equities, blasted currency trader Joe Lewis' venture after Lewis announced a potential 230p per share bid for M&B, his second offer for the Toby Carvery and Harvester pub group, after an initial bid was rejected.

'It is clear that the influence of Piedmont has impeded the board from acting in the interests of all shareholders,' Cumming (pictured) blasted. 'Piedmont has now exploited this instability with a wholly unsatisfactory offer for the company.  This offer is derisory.  The business is worth substantially more than the terms proposed.'

Troubled M&B has lost four chairmen over the past 18 months and Cumming, who runs SLI's UK Equity Recovery fund and a portion of the group's 0.34% holding in M&B, believes that a more robust board would never have allowed the situation to develop. 

As well as holding a 22.8% stake in M&B, Piedmont has two of appointees on M&B's five-strong board.  Through his investment vehicle Lewis floated a tentative proposal for the chain late on Monday evening, claiming it was based on last Friday's closing share price of 220.1p.  The offer would value the company's equity at £941 million and add a 4% premium on top the shares' closing price.

However, by the end of the trading session on Monday, M&B's shares had climbed by around 7% to 235.9p.  The pub group's three remaining board members said they would not recommend an offer to investors based on Lewis' terms.