Sales slowdown at Mitchells & Butlers likely to boost Joe Lewis' bid effort

Mitchells & Butlers, the perpetually-in-turmoil pubs group, offered a sluggish trading update today that may encourage billionaire currency trader Joe Lewis to push ahead with his low-ball takeover bid.

Lewis, who already owns 23% of the stock, is talking about making a putative 230p a share offer more formal - he has until mid-October to do so, under City takeover rules.

That's below today share price of 254p and well below what any City shareholder or analyst thinks the business is worth. Still, with sales in the nine weeks to September 17 up just 0.5%, Lewis may feel able to push the case.

Paul Leyland at Investec said: "We see this potentially impacting the value of any bid."

Interim chief executive Jeremy Blood would love a period of calm for a group that has gone through numerous bosses and dozens of directors in the last few years.

"No stakeholder, no staff member, no ordinary shareholder wouldn't like an end to the turmoil," he said.

In the last 51 weeks sales are up a more healthy 2.7%. Food, at 4.9%, is doing much better than drink, up 1%.

The company's strategy is to strongly push its budget food offer, expanding its Harvester chain and moving away from the wet-led pubs that define its early history.

It repeated its stance that the offer from Piedmont, Lewis' investment vehicle, "significantly undervalues the company".

Blood sees little reason to expect an improvement in trading any time soon, warning that consumers are increasingly stretched.

His independence was called into doubt yesterday by a report in The Guardian which revealed that he had recently approached Lewis for funding for a business venture.

He said today: "To me, being independent is always acting in the interest of the company and all the shareholders, and I don't think there is anything wrong with having good relationships with shareholder board representatives."

The role of Irish racing tycoons John Magnier and JP McManus remains open to question. They and acolyte Derrick Smith hold a combined 24% stake. If they joined with Lewis they could probably force a deal through.