Last month, the group announced plans to explore an equity capital raise, which it has now revealed will aim to raise £350m by means of a fully pre-emptive open offer.
It has also reached an agreement with its banks for a new £150m, three-year credit facility, subject to the completion of the open offer, and arranged a number of amendments and waivers which may be withdrawn should the offer fail to complete.
The proposal has been supported by M&B’s major shareholders, Piedmont, Elpida and Smoothfield, that have consolidated their holdings under a newly incorporated holding company – Odyzean Limited - to make available the full amount of £350 million to be raised.
Under the terms of the offer, the company will issue approximately 167 million new ordinary shares at a subscription price of 210 pence per share, representing a 36% discount to its closing share price on 12 February 2021.
“We are pleased to have received the support of our major shareholders and key creditors,” said Bob Ivell, M&B chairman.
“Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market share and continue its long-term strategy of deleveraging and driving value creation for shareholders.”