Joe Lewis 'seriously considering options' after takeover target Mitchells & Butlers' growth slows

M&B, which earlier this month rejected a 230p-a-share takeover proposal from Mr Lewis's Piedmont investment vehicle, said like-for-like sales had risen just 0.5pc in the nine weeks to September 17. The slow sales growth compared with a 3.1pc increase in the 42 weeks to July 16.

"It's a very disappointing report card," said a Piedmont spokesman, before suggesting the numbers could persuade Mr Lewis to walk away from a bid. "We are seriously considering our options."

The threat is, however, likely to be taken lightly by M&B and its instititional shareholders, who have branded Mr Lewis's 230p proposal as significantly undervaluing the pub company. Piedmont has until October 17 to table a bid and his decision is likely to be driven in most part by the perceived support of other shareholders, including Irish horseracing tycoons John Magnier and JP McManus, who hold 20.8pc of M&B via their Elpida investment vehicle

Elpida on Monday put out a statement, together with fellow racehorse owner Derrick Smith, in which the parties said they jointly held a 24.3pc stake in M&B. The statement suggests the two parties will vote together on any takeover offer.

Bob Ivell, interim chairman, reiterated the opposition of M&B's independent directors to an offer at 230p. "We think the price mooted significantly undervalues the business. We've had 34 successive quarters of like-for-like sales growth. That should underpin the value," he said. "You wouldn't sell a business on nine weeks of trading."

The Piedmont spokesman said the trading update "highlights our concerns about the operational and financial performance of the business". He claimed there continued to be "serious pressure on margins and cash flow generation", while also pointing to the lack of a dividend and questioning the success of M&B's expansion programme.

Food sales were particularly weak in the period, down from 5.8pc in the first 42 weeks to 1.1pc in the subsequent nine weeks. Drinks sales moved from 1.2pc growth to 0.2pc.

The slowdown reflects the more difficult recent sales environment in light of poor consumer confidence, the riots in London and Manchester, and tough comparable trading last year.

Jeremy Blood, M&B's interim chief executive, said that there was no obvious catalyst for an improvement in trading.

M&B shares fell 5.4 to 247.1p.