Six Continents rejects private equity approach

The UK pubs-to-hotels group has reportedly rejected a £2.8bn offer for its Mitchells & Butlers pubs and bars unit from BC Partners.

Six Continents, the UK leisure company at the centre of protracted restructuring discussions, has confirmed that it has received an offer for its Mitchells & Butlers (M&B) pub business.


In a statement issued this morning, Six Continents said that it had received a cash offer from a financial buyer for M&B, which runs the All Bar One and O’Neill’s pub chains in the UK, ‘following a number of expressions of interest from venture capitalists’. It said the offer, thought to have been made by BC Partners, valued the business at £2.8bn, and that was not conditional on a deferment of the demerger plans announced by Six Continents in February, which will see M&B become a separately-listed entity.


Responding to the offer, the Six Continents board committee, set up to oversee the demerger process, said the offer was “not considered sufficiently attractive” and would not be recommended to shareholders.


It is not yet known whether BC Partners, thought to be working alongside Martin Grant, former chief executive of Swallow Group and Inn Partnership, will make a higher offer for the business. BC Partners was unavailable for comment.


CVC Capital Partners and KKR have also been linked with offers relating to Six Continents, although both are thought to favour a bid for the company’s hotel unit, which with over 3,000 hotels is one of the world’s largest operators. The company runs the Inter-Continental, Crowne Plaza and Holiday Inn hotel chains. Marriott International, the US hotels group, is also considering a private equity-backed offer for UK hotel and pubs group Six Continents and has held talks over a possible joint bid with US buyout firm Texas Pacific.


Six Continents is being advised by Cazenove, Merrill Lynch and Schroder Salomon Smith Barney.