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Mon 15th Feb 2021 - JDW’s Tim Martin – pubs must be allowed to re-open at the same time as non-essential shops |
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JDW’s Tim Martin – pubs must be allowed to re-open at the same time as non-essential shops: Wetherspoon chairman Tim Martin is calling on the government to open pubs at the same time as non-essential shops reopen. He says that the pub industry is “on its knees” and that pubs across the UK need to reopen in order to save the industry and the associated jobs. The pub industry makes a massive contribution to the economy, with Wetherspoon alone paying about ten pounds of tax for every pound of profit it makes. Martin said: “In the last ten years Wetherspoon has generated £6.1 billion of taxes, something we are very proud of. In the financial year to July 2019, before the pandemic, Wetherspoon, its customers and employees generated £764 million of taxes, one pound in every thousand collected by the UK government. The amount of tax paid by Wetherspoon is replicated, according to the size of the company, throughout the pub industry, and shows just how important pubs are to the economy. Many people have correctly pointed out that the three lockdowns of the last year have been a disaster for the hospitality, retail, arts and entertainment industries, but our calculations show that they have been an even bigger disaster for public finances. The taxes paid by Wetherspoon are mirrored by thousands of companies which have been annihilated by lockdowns. As a result, government finances have been annihilated even more. Since pubs reopened last summer, following the first lockdown, Wetherspoon has registered more than 50 million customer visits to its pubs, using the test and trace system, without a single outbreak of covid-19, as defined by the health authorities, among customers in our pubs. Industry organisations UK Hospitality and the BBPA have provided the government with information that clearly demonstrates that pubs and restaurants are covid-secure environments, following the investment of hundreds of millions of pounds in safety and hygiene measures. The government knows this is correct, since it has access to test and trace information. As the BBPA has pointed out, outbreaks have been concentrated in environments such as care homes, households and hospitals. Yet the government has ignored this information and has even banned golf – the ultimate social distancing sport. The big worry in the hospitality industry is that the government is playing a PR game, creating an illusion of positive action, and will find an excuse to tie the industry down with restrictions by, for example, allowing outside eating and drinking only when the pubs reopen – as a result the entire industry would be heavily loss making. Since the 1970s, UK governments have run out of money three times when they’ve paid insufficient attention to financial common sense. The last time was in the Great Recession in 2010 when the chief secretary to the Treasury said: “I’m afraid there is no money”. Before that, billions were spent in an effort to remain in the disastrous exchange rate mechanism in 1992, and in the 1970s the government had to rely on financial aid from the IMF. However, this government is spending money at a faster rate than any government in history, In spite of that, around a million UK jobs have been lost already. Surely it is possible for the hospitality industry to reopen at the same time as non-essential shops, now that a vaccine exists, on the basis of the social distancing and hygiene regulations, which were agreed with the health authorities, after full consultation, for the 4 July reopening last year. Unless the industry does reopen on that basis, economic mayhem will inevitably follow.”
M&B to raise £350m from existing shareholders: Mitchells & Butlers intends to raise £350 million by means of an underwritten fully pre- emptive open offer. The company has also reached agreement with its relationship banks for a new £150 million three year unsecured revolving credit facility. Meanwhile shareholders Piedmont, Elpida and Smoothfield have informed Mitchells & Butlers that they have come together as a concert party and consolidated their holdings under a newly incorporated holding company, Odyzean Limited in order to help address the significant capital needs of Mitchells & Butlers and provide a clear and consistent framework for their future relationship with the company. A statement said: “Odyzean has indicated its intention to make available the full amount of £350 million to be raised, to ensure that the proposed open offer will be fully subscribed in all circumstances. Further to this, Odyzean has communicated to the company that it is fully supportive of Mitchells & Butlers’ management team, which has re-established the business as a sector leader with a strong focus and direction. Looking forward, Odyzean has indicated that, in order to streamline decision-making, it intends to review the composition of the board of directors, which may result in a reduced level of independent non-executive representation in the future. Odyzean has also informed the company that it intends to work with the existing management team to ensure the strategy and structure of the business are appropriate to optimise its long- term success and that the time and cost devoted to public company matters are reduced. As a result of the consolidation of the consortium’s shareholdings in the company, the Odyzean Group owns approximately 55% of the issued share capital of the company and therefore controls a majority of the votes in the company. Mitchells & Butlers’ lenders under its existing unsecured facilities have given their consent to the technical change of control of the company. In addition, The Takeover Panel, having sought the views of the company and its advisers, has confirmed to the company and the consortium that the coming together of the consortium under the structure described above carries no consequences under Rule 9 of the Takeover Code and no mandatory offer will be required to be made. As the Odyzean Group holds shares carrying more than 50% of the voting rights of the company, the Odyzean Group is free to acquire additional shares, in the proposed open offer or otherwise, without a mandatory offer being required to be made. Odyzean’s support for the company undertaking an equity capital raise is conditional on it being structured as a fully pre-emptive open offer at a subscription price of 210 pence per share. Under the terms of the proposed open offer, the company will issue approximately 167 million new ordinary shares. The subscription price of 210 pence per share represents a 36% discount to the company’s closing share price on 12 February 2021. It is anticipated that the proposed open offer will be fully underwritten at launch. As part of its support for the proposed open offer, Odyzean has indicated that it intends to enter into an irrevocable commitment with the company to (i) subscribe for the Odyzean Group’s basic entitlements under the proposed open offer, and (ii) to apply under the excess application facility for all of the shares that are not taken up by other shareholders, thereby ensuring that the proposed open offer will be fully subscribed from launch.” Bob Ivell, chairman of Mitchells & Butlers said: “We are pleased to have received the support of our major shareholders and key creditors. 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.”
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