MITCHELLS & BUTLERS PLC Open Offer of up to 166,937,606 New Shares at 210 Pence Per New Share Notice of General Meeting

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 (as amended) (FSMA) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. This document comprises (i) a circular prepared in accordance with the Listing Rules of the Financial Conduct Authority (FCA) made under section 73A of the FSMA and (ii) a prospectus relating to Mitchells & Butlers plc prepared in accordance with the Prospectus Regulation Rules of the FCA made under section 73A of the FSMA. This document has been approved by the FCA, as competent authority under Regulation (EU) 2017/1129, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (the UK Prospectus Regulation). The FCA only approves this document as meeting the standards of completeness, comprehensibility and consistency imposed by the UK Prospectus Regulation, and such approval should not be considered as an endorsement of the issuer that is, or the quality of the Shares that are, the subject of this document. Investors should make their own assessment as to the suitability of investing in the Shares. This Prospectus has been prepared as part of a simplified prospectus in accordance with Article 14 of the Prospectus Regulation. This document has been filed with the FCA in accordance with the Prospectus Regulation Rules and will be made available to the public in accordance with Prospectus Regulation Rule 3.2 by being made available, free of charge, at www.mbplc.com. If you sell or have sold or have otherwise transferred all of your Existing Shares (other than ex-entitlement) held in certificated form before 8.00 a.m. (London time) on 22 February 2021 (the Ex-Entitlement Date) please send this document, together with any Application Form, if and when received, at once to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee except that such documents should not be sent to any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including but not limited to Australia, Canada, Japan, New Zealand, the Republic of Ireland, South Africa and the United States (the Excluded Territories). If you sell or have sold or otherwise transferred only part of your holding of Existing Shares (other than ex-entitlement) held in certificated form prior to the Ex-Entitlement Date, please retain these documents and consult the stockbroker, bank or other agent through whom the sale or transfer was effected. The Company and each of the directors of the Company (the Directors), whose names and principal functions appear on page 44 of this document, accept responsibility for the information contained in this document. To the best of the knowledge of the Company and the Directors, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect its import.

MITCHELLS & BUTLERS PLC (Incorporated under the Companies Act 1985 and registered in England and Wales with registered number 04551498) Open Offer of up to 166,937,606 New Shares at 210 pence per New Share Notice of General Meeting Global Co-ordinator, Joint Bookrunner and Sponsor Morgan Stanley Joint Bookrunners HSBC Banco Santander Financial Adviser Rothschild & Co A Notice of General Meeting of the Company, to be held at 10:00 a.m. on 11 March 2021, is set out at the end of this document. Due to the UK Government restrictions on public gatherings and associated social distancing measures in respect of the COVID-19 pandemic, the General Meeting will be a closed meeting and it will not be possible for Shareholders to attend the General Meeting in person, and so it is necessary to make some adjustments to how the General Meeting would have otherwise been conducted. Shareholders will be able to listen to the business of the meeting via a telephone dial-in. Further detail on the process for how shareholders can dial-in to the General Meeting and cast their votes and ask questions in advance of the General Meeting is included in the Notice of General Meeting.

If you hold your Shares directly you are asked to submit your proxy electronically by accessing the Registrar’s website at www.sharevote.co.uk. To be valid, the electronic submission must be registered by not later than 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours prior to the time fixed for the holding of the adjourned meeting). To vote online you will need to use your Voting ID, Task ID and Shareholder Reference Number printed on your Form of Proxy. Full details of the procedure are given on the website, www.sharevote.co.uk. Alternatively, you may complete and return the enclosed Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by the Registrar, Equiniti, by not later than 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours prior to the time fixed for the holding of the adjourned meeting). You may request a hard copy Form of Proxy directly from the Registrar, Equiniti, by calling 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom).

CREST members may also choose to utilise the CREST electronic proxy appointment service in accordance with the procedures set out in the Notice of General Meeting at the end of this document, as soon as possible and in any event no later than 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours prior to the time fixed for the holding of the adjourned meeting).

The Directors are keen to ensure that Shareholders are able to exercise their right to vote and, accordingly, strongly recommends that Shareholders vote by way of proxy. As no persons other than those required to form a legal quorum will be permitted entry to the General Meeting, the Directors strongly encourage Shareholders to appoint the chairman of the meeting, rather than any other person, as their proxy to exercise their right to vote at the General Meeting in accordance with their instructions.

For the avoidance of doubt, it will not be possible to attend or vote in person at the General Meeting.

The Existing Shares are listed on the premium listing segment of the Official List and traded on the main market for listed securities of London Stock Exchange plc (the London Stock Exchange). Applications will be made to the FCA and to the London Stock Exchange for the New Shares to be admitted to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange. It is expected that Admission of the New Shares will become effective and that dealings on the London Stock Exchange in the New Shares will commence at 8.00 a.m. on 12 March 2021.

The distribution of this document and any accompanying documents in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document and any accompanying documents come should inform themselves about, and observe, any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of such jurisdictions. In particular, subject to certain exceptions, this document and any accompanying documents should not be distributed, forwarded to or transmitted in or into the United States, any of the other Excluded Territories or any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law.

Your attention is drawn to the letter of recommendation from the Chairman which is set out in Part I – Letter from the Chairman of Mitchells & Butlers plc. Your attention is also drawn to the section headed “Risk Factors” starting on page 15 of this document which sets out certain risks and other factors that should be considered by Shareholders when deciding what action to take in relation to the Resolutions, and whether or not to subscribe for New Shares. Notwithstanding this, you should read the entire document and any documents incorporated by reference.

Morgan Stanley & Co. International plc (Morgan Stanley), and HSBC Bank plc (HSBC) are authorised in the United Kingdom by the Prudential Regulation Authority (PRA) and regulated in the United Kingdom by the FCA and the PRA and Banco Santander, S.A. (Santander, and together with Morgan Stanley and HSBC, the Underwriters) is authorised and regulated by the Bank of Spain and subject to supervision by the Bank of

1 Spain and by the European Central Bank and to limited regulation by the FCA and the PRA. N. M. Rothschild & Sons Limited (Rothschild & Co or the Financial Adviser) is authorised and regulated in the United Kingdom by the FCA. The Underwriters and/or the Financial Adviser are acting exclusively for the Company and for no one else in connection with the Open Offer and will not regard any other person as a client in relation to the Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in connection with the Open Offer or any other matter, transaction or arrangement referred to in this document.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters and/or on the Financial Adviser by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Underwriters, the Financial Adviser, nor any of their respective affiliates, directors, officers, employees and/or advisers, accepts any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this document, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the New Shares or the Open Offer. The Underwriters, the Financial Adviser and/or their respective affiliates, directors, officers, employees and/or advisers accordingly disclaim to the fullest extent permitted by law any and all duty, liability or responsibility whatsoever, whether direct or indirect arising in tort, under statute or contract or otherwise, which they might otherwise have in respect of this document or any such statement.

The contents of this document are not to be construed as legal, business or tax advice. Each prospective investor should consult their own legal, financial or tax adviser in connection with actions taken in respect of the New Shares. In making an investment decision, each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Open Offer described herein, including the merits and risks involved.

Recipients of this document also acknowledge that: (i) they have not relied on the Underwriters, the Financial Adviser and/or any person(s) affiliated with the Underwriters and/or the Financial Adviser in connection with any investigation of the accuracy of any information contained in this document or their investment decision; and (ii) they have relied only on the information contained in this document and that no person has been authorised to give any information or to make any representation concerning the Company or its subsidiaries or the New Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company, the Underwriters and/or the Financial Adviser.

In connection with the Open Offer, the Underwriters, the Financial Adviser and/or any of their respective affiliates may, in accordance with applicable legal and regulatory provisions, and subject to the Underwriting Agreement, engage in transactions in relation to the New Shares or related instruments. Accordingly, references in this document to the New Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Underwriters, the Financial Adviser and/or any of their respective affiliates acting as investors for their own account. Except as required by applicable law or regulation, the Underwriters, the Financial Adviser and/or their respective affiliates do not propose to make any public disclosure in relation to such transactions. In addition, the Underwriters, the Financial Adviser and/or their respective affiliates may enter into financing arrangements (including swaps or contracts for difference) with investors in connection with which the Underwriters, the Financial Adviser and/or their respective affiliates may from time to time acquire, hold or dispose of the New Shares. In the event that the Underwriters acquire New Shares which are not taken up by Qualifying Shareholders, the Underwriters may co-ordinate disposals of such shares in accordance with applicable law and regulation. Except as required by applicable law or regulation, the Underwriters and their respective affiliates do not propose to make any public disclosure in relation to such transactions.

Each of the Underwriters and their respective affiliates may have engaged in transactions with, and provided various commercial banking, investment banking, financial advisory transactions and services in the ordinary course of their business with the Company and/or its affiliates for which they would have received customary fees and commissions. Each of the Underwriters and their respective affiliates may provide such services to the Company and/or its affiliates in the future.

In the ordinary course of their various business activities, each of the Underwriters and their respective affiliates may hold a broad array of investments and actively trade debt and equity securities (or related

2 derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) in the Company and/or its affiliates for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. In addition, certain of the Underwriters or their affiliates are, or may in the future be, lenders, and in some cases agents or managers for the lenders, under certain of the Company’s credit facilities and other credit arrangements, or its affiliates’. In their capacity as lenders, such lenders may, in the future, seek a reduction of a loan commitment to the Company or its affiliates, or impose incremental pricing or collateral requirements with respect to such facilities or credit arrangements, in the ordinary course of business. In addition, certain of the Underwriters and/or any of their affiliates that have a lending relationship with the Company or its affiliates may routinely hedge their credit exposure to the Company or its affiliates consistent with their customary risk management policies; a typical hedging strategy would include the Underwriters or their affiliates hedging such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in the Shares and/or the New Shares.

The latest time and date for acceptance and payment in full for the New Shares under the Open Offer is 11.00 a.m. on 10 March 2021. The procedures for acceptance and payment are set out in the Application Form and, where relevant, in Part III – Terms and Conditions of the Open Offer of this document. Qualifying Non- CREST Shareholders will be sent an Application Form. Qualifying CREST Shareholders (who will not receive an Application Form) will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements and Excess Open Offer Entitlements, which is expected to be enabled for settlement on 10 March 2021.

Applications under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim arising out of a sale or transfer of Existing Shares prior to the date on which the Existing Shares were marked ‘ex’ the entitlement by the London Stock Exchange. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer. The Application Form is personal to Qualifying Shareholders and cannot be transferred, sold, or assigned except to satisfy bona fide market claims. Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer.

Notice to Overseas Shareholders

This document does not constitute an offer of New Shares to any person with a registered address, or who is located, in the United States or the other Excluded Territories or in any other jurisdiction in which such an offer or solicitation is unlawful. The New Shares, Open Offer Entitlements and Excess Open Offer Entitlements have not been and will not be registered or qualified for distribution to the public under the relevant laws of any state, province or territory of the United States or any other Excluded Territory and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the United States or any other Excluded Territory or in any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law, except pursuant to an applicable exemption.

The New Shares, Open Offer Entitlements and Excess Open Offer Entitlements have not been and will not be registered under the Securities Act, or under any securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the United States. There will be no public offer of the New Shares, Open Offer Entitlements and Excess Open Offer Entitlements in the United States.

The New Shares, Open Offer Entitlements and Excess Open Offer Entitlements have not been approved or disapproved by the United States Securities and Exchange Commission, any state’s securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offer of the New Shares, Open Offer Entitlements and Excess Open Offer Entitlements or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence.

The New Shares, Open Offer Entitlements and Excess Open Offer Entitlements have not been and will not be registered or qualified for distribution to the public under the securities laws of any Excluded Territory and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within any Excluded Territory or in any other jurisdiction where the extension and availability of the Open Offer would breach any applicable law, except pursuant to an applicable exemption from, and in compliance with, any

3 applicable securities laws. There will be no public offer in any of the Excluded Territories or in any other jurisdiction where the extension and availability of the Open Offer would breach any applicable law. Notice to prospective investors in the Isle of Man

The Open Offer is available, and is and may be made, in or from within the Isle of Man and this document is being provided in or from within the Isle of Man only: (i) by an Isle of Man financial services licence holder licensed under Section 7 of the Isle of Man Financial Services Act 2008 in order to do so; or (ii) in accordance with any relevant exclusion contained within the Isle of Man Regulated Activities Order 2011 (as amended) or exemption contained in the Financial Services (Exemptions) Regulations 2011 (as amended).

The Open Offer and this document, and any other document issued by the Company in connection with the Open Offer, are not available in or from within the Isle of Man other than in accordance with the above paragraph and must not be relied upon by any person unless made or received in accordance with the above paragraph. Notice to all investors

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the New Shares is prohibited. By accepting delivery of this document, each offeree of the New Shares agrees to the foregoing.

In making an investment decision, each investor must rely on their own examination, analysis and enquiry of the Company and the terms of the Open Offer, including the merits and risks involved.

The distribution of this document and/or the Application Form and/or the transfer of the New Shares, Open Offer Entitlements and Excess Open Offer Entitlements into jurisdictions other than the United Kingdom may be restricted by law. This document does not constitute an offer of New Shares, Open Offer Entitlements or Excess Open Offer Entitlements in any jurisdiction in which such offer or solicitation is unlawful. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, such documents should not be distributed, forwarded to or transmitted in or into the United States, any other Excluded Territory or in any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law. The New Shares, Open Offer Entitlements, Excess Open Offer Entitlements and Application Forms are not transferable, except in accordance with, and the distribution of this document is subject to, the restrictions set out in paragraph 8 of Part III – Terms and Conditions of the Open Offer. No action has been taken by the Company, the Underwriters and/or the Financial Adviser that would permit an offer of the New Shares or possession or distribution of this document or any other offering or publicity material or the Application Forms in any jurisdiction where action for that purpose is required, other than in the United Kingdom.

None of the Underwriters, nor any of their respective affiliates, directors, officers, employees or advisers, is making any representation to any offeree, subscriber or acquirer of New Shares regarding the legality of an investment in the New Shares, by such offeree, subscriber or acquirer under the law applicable to such offeree, subscriber or acquirer. Each investor should consult with his or its own advisers as to the legal, tax, business, financial and related aspects of an investment in the New Shares.

Investors also acknowledge that: (a) they have not relied on the Underwriters (or any of their affiliates) in connection with any investigation of the accuracy of any information contained in this document or their investment decision; (b) they have relied only on the information contained in this document in making their relevant decision; and (c) no person has been authorised to give any information or to make any representation concerning the Company or the New Shares or the Open Offer (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company or the Underwriters (or any of their affiliates).

No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied upon as having been authorised by the Company, the Underwriters and/or the Financial Adviser. Neither the delivery of this document nor any subscription or sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this document or that the information in this document is correct as at any time subsequent to its date.

4 Unless explicitly incorporated by reference herein, the contents of the websites of the Group do not form part of this document. Capitalised terms have the meanings ascribed to them, and certain technical terms are explained, in Part XII – Definitions and Glossary.

INFORMATION FOR DISTRIBUTORS

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the UK Product Governance Requirements), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the New Shares to be issued in the Open Offer have been subject to a product approval process, which has determined that the New Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the Target Market Assessment). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the New Shares may decline and investors could lose all or part of their investment; the New Shares offer no guaranteed income and no capital protection; and an investment in the New Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Open Offer.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Shares and determining appropriate distribution channels.

Where to find help

Part II – Some Questions and Answers about the Open Offer of this document answers some of the questions most often asked by shareholders about open offers. If you have further questions, please call Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Please note that, for legal reasons Equiniti is only able to provide information contained in this document and information relating to the Company’s register of members and is unable to give advice on the merits of the Open Offer.

This document is dated 22 February 2021.

5 CONTENTS

Page

SUMMARY ...... 7

RISK FACTORS ...... 15

IMPORTANT INFORMATION ...... 37

OPEN OFFER STATISTICS ...... 42

EXPECTED TIMETABLE OF PRINCIPAL EVENTS ...... 43

DIRECTORS, COMPANY SECRETARY AND ADVISERS ...... 44

PART I – LETTER FROM THE CHAIRMAN OF MITCHELLS & BUTLERS PLC ...... 45

PART II – SOME QUESTIONS AND ANSWERS ABOUT THE OPEN OFFER ...... 66

PART III – TERMS AND CONDITIONS OF THE OPEN OFFER ...... 73

PART IV BUSINESS OVERVIEW OF THE GROUP ...... 99

PART V – OPERATING AND FINANCIAL REVIEW ...... 118

PART VI – CAPITALISATION AND INDEBTEDNESS ...... 127

PART VII – FINANCIAL INFORMATION OF THE GROUP ...... 129

PART VIII – UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 131

PART IX – TAXATION ...... 135

PART X – ADDITIONAL INFORMATION ...... 138

PART XI – DOCUMENTATION INCORPORATED BY REFERENCE ...... 168

PART XII – DEFINITIONS AND GLOSSARY ...... 169

NOTICE OF GENERAL MEETING ...... 175

6 SUMMARY A. INTRODUCTION AND WARNINGS A.1.1 Name and international securities identifier number (ISIN) of the securities

Ordinary shares: ISIN code GB00B1FP6H53

Ordinary shares: SEDOL number B1FP6H5

Open Offer Entitlements: ISIN code GB00BLH1P296

Excess Open Offer Entitlements: ISIN code GB00BLH1P304

A.1.2 Identity and contact details of the issuer, including its Legal Entity Identifier

The Company’s legal name is Mitchells & Butlers plc (the Company). The commercial name is “Mitchells & Butlers”. The Company’s registered address is 27 Fleet Street, Birmingham, B3 1JP and its telephone number +44 (0)121 498 4000. The Company’s Legal Entity Identifier is 213800JHYNDNB1NS2W10.

A.1.3 Identity and contact details of the competent authority approving the prospectus

This document has been approved by the FCA, as competent authority, with its head office at 12 Endeavour Square, London E20 1JN, and telephone number: +44 (0)20 7066 1000, in accordance with the UK Prospectus Regulation.

A.1.4 Date of approval of the prospectus

This document was approved on 22 February 2021.

A.1.5 Warning

This summary has been prepared in accordance with Article 7 of Regulation (EU) 2017/1129 and should be read as an introduction to this document. Any decision to invest in the Shares should be based on a consideration of this document as a whole by the investor. Any investor could lose all or part of their invested capital and, where any investor’s liability is not limited to the amount of the investment, it could lose more than the invested capital. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or where it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in the Shares.

B. KEY INFORMATION ON THE ISSUER B.1 Who is the issuer of the securities?

B.1.1 Domicile, legal form, jurisdiction of incorporation, country of operation and Legal Entity Identifier

The Company was incorporated on 2 October 2002 as a public limited company under the Companies Act 1985 and is registered in England and Wales with registered number 04551498. Its Legal Entity Identifier is 213800JHYNDNB1NS2W10.

B.1.2 Principal activities

Mitchells & Butlers is a leading operator of managed restaurants, pubs and bars in the United Kingdom. As at 26 September 2020, the Group had 1,660 managed businesses and provides a wide choice of eating and drinking-out experiences through its 15 brands, with a focus on great service, quality and value for money to its customers. The Group was formed in 1898 and has grown to become a leading operator of managed restaurants, pubs and bars in the United Kingdom. In FY19, uninterrupted by closure, the Group served nearly 120 million meals, as well as approximately 380 million drinks. As at 26 September 2020, Mitchells & Butlers employed over 40,000 people in pubs, bars and restaurants that are located across the length and breadth of the United Kingdom, with 82 per cent. of the population of Great Britain within five miles of one of its sites. The Group also

7 employs approximately 2,000 people in Germany in its ALEX brasserie restaurants and bars and Miller & Carter restaurant.

B.1.3 Major shareholders

Insofar as is known to the Company, the name of each person who, directly or indirectly, has an interest in 3.0 per cent. or more of the Company’s issued share capital, and the amount of such person’s interest, as at 19 February 2021 (being the latest practicable date prior to the publication of this document), are as follows:

Shares Name No. % Odyzean Group(1) ...... 236,199,685 55.0% Standard Life Aberdeen plc ...... 24,398,876 5.7%

Notes: (1) Odyzean Limited (which is jointly owned by certain investment vehicles that are respectively ultimately beneficially owned by (i) the family interests of Joseph C. Lewis, (ii) the family interests of John Magnier, (iii) the family interests of John Patrick McManus and (iv) the family interests of Derrick Smith) beneficially owns 100 per cent. of each of Piedmont Inc., Elpida Group Limited and Smoothfield Holding Ltd. (collectively, the Odyzean Group), which beneficially own 27.10 per cent., 23.49 per cent. and 4.43 per cent. of the share capital of the Company, respectively. Insofar as is known to the Company, immediately following the Open Offer, the interests of those persons set out above with an interest in 3.0 per cent. or more of the Company’s issued share capital, and the amount of such persons’ interests, including as a percentage of the Enlarged Share Capital (assuming full take up by such persons of their rights under the Open Offer and no options granted under the Share Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and the completion of the Open Offer), will be as follows:

Shares Name No. % Odyzean Group(1) ...... 328,055,115 55.0% Standard Life Aberdeen plc ...... 33,887,328 5.7%

Notes: (1) The Odyzean Group has irrevocably undertaken to take up all of its rights to subscribe for New Shares in the Open Offer and to take up all additional Shares made available and allocated to it under the Excess Application Facility. If no other Qualifying Shareholders apply to subscribe for their Open Offer Entitlements and, therefore, members of the Odyzean Group are the only Shareholders that take up New Shares pursuant to the Open Offer, the shareholding of the Odyzean Group will increase to 67.6 per cent. of the Company’s Enlarged Share Capital.

B.1.4 Key officers

Phil Urban is the Chief Executive Officer of the Company and Tim Jones is the Chief Financial Officer of the Company.

B.1.5 Identity of the statutory auditors

Deloitte LLP of 1 New Street Square, London EC4A 3HQ is the statutory auditor to the Company.

B.2 What is the key financial information regarding the issuer?

The tables below set out the Group’s summary financial information for the periods indicated.

The financial information set forth below is extracted without material adjustment from, and should be read in conjunction with, the consolidated financial statements of the Company for FY18, FY19 and FY20, incorporated by reference in this document as described in Part XI – Documentation Incorporated by Reference.

8 Summary Group income statements:

52 weeks ended 29 September 28 September 26 September 2018 2019 2020(1) (£ millions) Revenue ...... 2,152 2,237 1,475 Operating costs before depreciation, amortisation and movements in the valuation of the property portfolio . . . . (1,736) (1,820) (1,219) Share in associates’ results ...... - - (1) Net profit arising on property disposals ...... 1 1 - EBITDA ...... 417 418 255 Depreciation, amortisation and movements in the valuation of the property portfolio ...... (162) (121) (247) Operating profit ...... 255 297 8 Finance costs ...... (119) (114) (128) Finance revenue ...... 1 1 1 Net pensions finance charge ...... (7) (7) (4) Profit/(Loss) before tax ...... 130 177 (123) Tax (charge)/credit ...... (26) (34) 11 Profit/(Loss) for the period ...... 104 143 (112)

Notes: (1) The Group has adopted the IFRS16 Leases standard from 29 September 2019 (the date of initial adoption). Adoption of IFRS16 has had a significant impact on the consolidated income statement and consolidated statement of financial position, the impact of which is summarised in Notes 1 and 5.3 of the FY20 Financial Statements, which are incorporated by reference into this document.

Summary Group balance sheets:

As at 29 September 28 September 26 September 2018 2019 2020(1) (£ millions) Non-current assets ...... 4,550 4,667 4,870 Current assets ...... 328 225 239 Non-current liabilities ...... (2,479) (2,425) (2,731) Current liabilities ...... (630) (520) (701) Net assets ...... 1,769 1,947 1,677

Notes: (1) The Group has adopted the IFRS16 Leases standard from 29 September 2019 (the date of initial adoption). Adoption of IFRS16 has had a significant impact on the condensed consolidated income statement and condensed consolidated statement of financial position, the impact of which is summarised in Notes 1 and 5.3 of the FY20 Financial Statements, which are incorporated by reference into this document.

Summary Group cash flow statements:

52 weeks ended 29 September 28 September 26 September 2018 2019 2020 (£ millions) Cash and cash equivalents at the beginning of the period (total) ...... 147 122 133 Net cash from operating activities ...... 240 266 127 Net cash used in investing activities ...... (171) (18) (104) Net cash used in financing activities ...... (94) (237) 1 Foreign exchange movements on cash ...... - - 1 Cash and cash equivalents at end of the period (total) . 122 133 158

Other than as set out below, there has been no significant change in the financial position or financial performance of the Group in the period since 26 September 2020, being the date to which the latest financial information in relation to the Group was published.

Since the UK Government announcement on 30 December 2020, which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group’s sites have

9 been open and the Group is not currently trading. All of the Group’s German businesses were closed on 1 November 2020. In addition, in the FY20 Financial Statements, the Group identified a post- balance sheet event of a reduction of £43 million in the book value of property, plant and equipment, which is summarised in Note 5.4 of the FY20 Financial Statements, which are incorporated by reference into this document.

Across the first quarter to 16 January 2021, total managed sales were 69.8 per cent. below the prior year. On a like-for-like basis (calculated weekly for weeks 5 to 16) trading was 30.1 per cent. down on the prior year across this period. The Group had a cash balance of £113 million as at 16 January 2021. On 18 January 2021, the Company and the trustees agreed to a deferment of deficit contributions from January and February to March with immediate effect, and, subject to certain conditions, the two deferred instalments from January and February and the March instalment may be further deferred to April. Taking this into account, from 1 January 2021 through to the date of this document, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also had securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non essential capital expenditure continues to be suspended. As at 16 January 2021, the Group operated 1,649 managed restaurants, pubs and bars.

B.3 What are the key risks that are specific to the issuer?

If the Open Offer, and consequently the New Debt Package, are not completed successfully, absent alternative measures, the Group would experience a liquidity shortfall, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company.

If the Open Offer is not completed successfully, it is expected that absent alternative measures, the 2021 WBS Amendments and Waivers would be withdrawn such that the WBS Group will default under the WBS financing, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company.

The WBS Group’s failure to meet its debt obligations or comply with the terms of its WBS financing could harm its business, financial condition and results of operations and the security granted over the WBS Estate would be at risk of being enforced and WBS assets and/or business sold.

The Group has negotiated a New Debt Package and the 2021 WBS Amendments and Waivers, the terms of which may limit its financial and operational flexibility. The Group has also agreed to certain restrictions in consideration for the 2021 WBS Amendments and Waivers including restrictions on the ability of the WBS Group to make payments of dividends to the wider Group and restrictions on the Company from making payments of dividends to its shareholders for so long as such amendments and waivers subsist.

The COVID-19 pandemic has had, and is expected to continue to have, a significant impact on the Group’s business, financial condition, results of operations and prospects.

Changes in customer discretionary spending and general economic conditions could have a material adverse effect on the Group’s business, financial condition and results of operations.

Adverse developments with respect to the safety or the contents of the Group’s food and/or the food industry in general may damage the Group’s reputation, increase its costs of operations or decrease demand for its products.

Failure to respond to changes in customer preferences and the Group’s ability to predict, identify and interpret demand and to anticipate the changing tastes and dietary habits of customers could adversely affect the Group’s business.

The Group is vulnerable to fluctuations in the price and availability of raw materials and drinks. If the Group is unable to pass these price increases on to its customers, such fluctuations may have a material adverse effect on the Group’s cost of sales and gross profit.

10 C. KEY INFORMATION ON THE SECURITIES C.1 What are the main features of the securities? C.1.1 Type, class and ISIN

Pursuant to the Open Offer, the Company will issue up to 166,937,606 new ordinary shares of 8 13/24 pence each in the capital of the Company (the New Shares). The Open Offer will be made on the basis of 7 New Shares for every 18 existing ordinary share in the Company as at the Record Date (the Existing Shares).

When admitted to trading on the main market for listed securities of London Stock Exchange, the New Shares (all of which are ordinary shares) will be registered with ISIN number GB00B1FP6H53 and SEDOL number B1FP6H5 and trade under the symbol “MAB”. The ISIN for the Open Offer Entitlements will be GB00BLH1P296 and the ISIN for the Excess Open Offer Entitlements will be GB00BLH1P304.

C.1.2 Currency, denomination, par value, number of securities issued and duration

The currency of the issue is United Kingdom pounds sterling.

Immediately prior to the publication of this document, the aggregate nominal value of the share capital of the Company was £36,666,653, comprising 429,268,130 Existing Shares of 8 13/24 pence each, all of which were fully paid or credited as fully paid.

The issued and fully paid aggregate nominal value of the share capital of the Company immediately following completion of the Open Offer will be up to £50,925,907, comprising up to 596,205,736 Shares of 8 13/24 pence each (assuming no options granted under the Shares Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and the completion of the Open Offer).

C.1.3 Rights attached to the Shares

The New Shares will, when issued and fully paid, rank equally in all respects with the Existing Shares, including the right to receive all dividends and other distributions made, paid or declared after the date of issue of the New Shares.

C.1.4 Rank of securities in the issuer’s capital structure in the event of insolvency

The New Shares will not carry any rights to participate in a distribution (including on a winding-up) other than those that exist under the Companies Act 2006. The New Shares and the Existing Shares will rank pari passu in all respects.

C.1.5 Restrictions on the free transferability of the securities

There are no restrictions on the free transferability of the Shares save as provided in the Articles.

C.1.6 Dividend or pay-out policy

The Company has obligations, notably in respect of debt service and pension fund contributions, which the Company would want or need to meet before considering any distribution to Shareholders. Capital allocation decisions are made primarily to protect the ongoing and future health of the business and when assessing dividends the Directors would not expect to see a structural, or permanent, increase in the use of short-term facilities.

In connection with the 2021 WBS Amendments and Waivers agreed on 14 February 2021, the Group has agreed not to pay any external dividend until any drawings the Issuer has made under its liquidity facility have been repaid in full and the debt service covenant has been fully reinstated and met by the WBS Group (the debt service covenant has been waived and/or modified until January 2023 although the Borrower has the option to terminate such waivers and modifications at an earlier date if it is of the opinion that it will be able to meet the debt service covenant in its unwaived or unmodified form from that time).

11 Under the Santander CLBILS, the Company has agreed not to pay any external dividend until the Santander CLBILS is repaid. This is a requirement under the UK Government backed CLBILS. Under the New RCF Agreement, the Company has agreed not to pay any external dividend until the covenant testing date falling on 2 July 2022.

In addition, a company requires the approval of a majority of its shareholders to pay a final dividend. The Odyzean Group, which holds a majority of the Company’s Shares, has indicated that it would prefer the Company to prioritise debt repayment and investment in the Group’s businesses over the payment of dividends for the foreseeable future.

C.2 Where will the securities be traded?

Application will be made to the FCA for the New Shares to be admitted to the premium listing segment of the Official List and to the London Stock Exchange for such Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities.

C.3 What are the key risks that are specific to the securities? Risks relating to the Shares

The Odyzean Group has a significant interest in the Company’s Shares, which may increase further as a result of the Open Offer, and it will be in a position to exert substantial influence over the Group and the Odyzean Group’s interests may differ from or conflict with those of other Shareholders. In addition, the Odyzean Group has indicated that, as the majority Shareholder in the Company, it intends to request that the Board focuses on ensuring the strategy and structure of the business are appropriate to optimise its long-term, rather than short-term, shareholder value creation.

An active trading market for the New Shares may not develop.

The market price for the Shares may decline below the Offer Price and Shareholders may not be able to sell Shares at a favourable price after the Open Offer.

The Company does not currently pay dividends on the Shares and has agreed under the 2021 WBS Amendments and Waivers, the Santander CLBILS and the New RCF Agreement not to pay dividends until certain conditions are met. In addition, the Odyzean Group, which holds a majority of the Company’s Shares, has indicated that it would prefer the Company to prioritise debt repayment and investment in the Group’s businesses over the payment of dividends for the foreseeable future.

Shareholders who do not acquire New Shares in the Open Offer will experience dilution in their ownership of the Company.

D. KEY INFORMATION ON THE ADMISSION TO TRADING ON A REGULATED MARKET D.1 Under which conditions and timetable can I invest in this security?

It is expected that Admission of the New Shares will become effective and that dealings in the New Shares will commence at 8.00 a.m. on 12 March 2021.

The Company proposes to issue up to 166,937,606 New Shares in the Open Offer. Pursuant to the Open Offer, New Shares will be offered to Qualifying Shareholders on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Application Form. The Open Offer is to be made at 210 pence per New Share, payable in full on acceptance by no later than 11.00 a.m. on 10 March 2021. The Offer Price represents a discount of 36 per cent. to the closing price of 328.5 pence per Existing Share on 12 February 2021 (the last Business Day before the publication of the Announcement).

12 The Open Offer will be made on the basis of 7 New Shares at 210 pence per New Share for every 18 Existing Shares held on the Record Date (and so in proportion for any other number of Existing Shares then held) and otherwise on the terms and conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, also in the Application Forms. Qualifying Shareholders may also apply, under the Excess Application Facility, for Excess Shares not taken up under the Open Offer Entitlements of other Qualifying Shareholders. The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. If the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the Underwriting Agreement.

The Open Offer will be made to Shareholders by means of a notice in the London Gazette.

The terms of the Open Offer provide that each Qualifying Shareholder’s entitlement under the Open Offer will be rounded down to the nearest whole number and any fractional entitlement will be discarded. The aggregate number of New Shares available for subscription pursuant to the Open Offer (including any New Shares that may be issued under the Excess Application Facility) will not exceed 166,937,606 New Shares.

The Open Offer is conditional, inter alia, upon:

(i) the passing of the Resolutions at the General Meeting without material amendment;

(ii) the Underwriting Agreement having become or been declared unconditional in all respects save for the condition relating to Admission of the New Shares; and

(iii) Admission of the New Shares becoming effective by not later than 8.00 a.m. on 12 March 2021 (or such later time and/or date as the Company and the Global Co-ordinator may agree, being not later than 31 March 2021).

If a Shareholder does not (or is not permitted to) take up the offer of New Shares under the Open Offer, such Shareholder’s proportionate ownership and voting interests in the Company will be diluted by up to 28.0 per cent. as a result of the Open Offer. For the purposes of calculating: (i) the number of New Shares to be issued pursuant to the Open Offer; (ii) the increase to the Existing Share Capital resulting from the Open Offer; and (iii) the specified dilutive effect of the Open Offer, the issue of any Shares in respect of the vesting or exercise of any awards under the Share Schemes which may occur between the Latest Practicable Date and the Record Date has been disregarded.

D.2 Why is this document being produced?

The purpose of this document is to explain the background to, reasons for, and to set out the terms and conditions of, the Open Offer. The Directors believe the Open Offer to be in the best interests of Shareholders as a whole and this document explains why the Directors unanimously recommend that Shareholders should vote in favour of the Resolutions, as each Director has committed to do so in respect of his or her own legal and beneficial holdings of Shares.

Pursuant to the Open Offer, the Company proposes to issue up to 166,937,606 New Shares. Through the issue of New Shares, the Company expects to raise gross proceeds of up to £351 million. The total costs, charges and expenses payable by the Company in connection with the Open Offer are estimated to be approximately £11 million (inclusive of VAT), which the Company intends to pay out of the proceeds of the Open Offer.

The Company intends to use the net proceeds of the Open Offer for:

• Repayment of £100 million in debt in connection with the refinancing of the Existing Facilities;

• Full repayment of £150 million under the RCF Agreements (offset in full by £150 million made available under the New RCF Agreement);

• Paying overdue rental payments of £28 million and deferred VAT of £30 million;

13 • Making an equity injection into the WBS Group in order to enable the WBS Group to repay an anticipated £60 million of debt to be incurred under the WBS’ Liquidity Facility as at March 2021, with full repayment of the drawn amount to be settled no later than December 2021;

• Making deferred pension payments of £13 million in respect of each of January, February and March 2021; and

• The general funding of the business going forward including cash payments in advance of the estate resuming trade and the future purchase of sites which come to market if there is sufficient funding to do so.

14 RISK FACTORS

The Open Offer and any investment in the New Shares are subject to a number of risks. Accordingly, Shareholders and prospective investors should carefully consider the factors and risks associated with any investment in the New Shares, the Group’s business and the industry in which it operates, together with all other information contained in this document and all of the information incorporated by reference into this document, including, in particular, the risk factors described below, and their personal circumstances prior to making any investment decision. Some of the following factors relate principally to the Group’s businesses. Other factors relate principally to the Open Offer and an investment in the New Shares. The Group’s businesses, operating results, financial condition and prospects could be materially and adversely affected by any of the risks described below. In such case, the market price of the New Shares may decline and investors may lose all or part of their investment.

Prospective investors should note that the risks relating to the Group, its industry and the New Shares, summarised in the section of this document headed “Summary” are the risks that the Company considers to be the most essential to an assessment by a prospective investor of whether to consider an investment in the New Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section of this document headed “Summary” but also, among other things, the risks and uncertainties described below.

The following is not an exhaustive list or explanation of all risks which investors may face when making an investment in the New Shares and should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Group, or that it currently deems immaterial, may individually or cumulatively also have a material adverse effect on the Group’s business, prospects, operating results and financial condition and, if any such risk should occur, the price of the New Shares may decline and investors could lose all or part of their investment. Investors should consider carefully whether an investment in the New Shares is suitable for them in the light of the information in this document and their personal circumstances.

Risks relating to the Group’s business and industry

The Company’s Existing Facilities (consisting of bilateral revolving facility agreements entered on 20 September 2017 with Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc (the Lenders) and the bilateral term facility agreements (structured under the UK Government-backed Coronavirus Large Business Interruption Loan Scheme (the CLBILS) entered into with HSBC UK Bank plc and Santander UK plc on 11 June 2020 (the CLBILS facility with Santander UK plc being the Santander CLBILS)) are due to mature on 31 December 2021. On 14 February 2021, the Company entered into a New Debt Package which is intended to refinance the Existing Facilities, save for the Santander CLBILS of £50 million which may remain outstanding (the Refinanced Facilities). The New Debt Package is conditional upon successful completion of the Open Offer. Consequently, if any of the resolutions relating to the Open Offer are not approved and the Open Offer is not completed successfully, the New Debt Package will lapse and cease to be available to the Company. The New Debt Package is not, however, conditional on the 2021 WBS Amendments and Waivers set out below (and there would be no default under the New Debt Package in relation to the WBS Group, including if the 2021 WBS Amendments and Waivers were not in place).

Failure to complete the New Debt Package would mean that the Group would breach a number of financial covenants in the Existing Facilities, with the first breach occurring on 10 April 2021. The minimum liquidity headroom in the Existing Facilities as at the end of each four-week accounting period would need to be maintained. The next four test dates are 13 March 2021, 10 April 2021, 8 May 2021 and 5 June 2021. The minimum liquidity headroom required by the Existing Facilities is £30 million as at 13 March 2021 and £25 million as at 10 April 2021 and at the end of each four-week accounting period thereafter. The Company expects that it would not meet this requirement for the first time on 10 April 2021 with a shortfall of £32 million. The minimum liquidity covenant under each of the Existing Facilities has been waived from launch of the Open Offer until the earliest of six weeks after such launch, receipt of proceeds from the Open Offer and 31 May 2021. At the end of the waiver period, the Company must ensure that the minimum liquidity covenant was met at the previous test dates. The remaining financial covenants do not apply until the test date

15 on 10 April 2021. At that date, the relevant test would be in respect of the ratio of the EBITDAR of members of the Group which are not part of the WBS Group (the Unsecured Group) to net rent payable plus interest, for each of the two preceding quarterly testing dates. The Company would fail this test on that date, with an EBITDAR shortfall of £53 million. Such breaches would constitute events of default under the Existing Facilities entitling the Lenders to declare all amounts outstanding under the Existing Facilities (approximately £250 million as at 19 February 2021) as immediately due and payable, and to take enforcement action against the Group.

The Directors do not expect the Group to have sufficient funds available to repay the expected amounts due as at the maturity date of the Existing Facilities on 31 December 2021 in such circumstances. In the absence of being able to agree or implement successfully any of the alternative arrangements considered below, enforcement action by the Lenders (by way of accelerating their loans and/or insolvency proceedings) would likely result in Shareholders losing all or a substantial part of the value of their investment in the Company.

If the Open Offer does not proceed, the Company would put in place an action plan to seek to avoid the possibility of enforcement action by the Lenders. The Directors expect that the Company would seek to obtain waivers, amendments and/or standstills, although the Lenders have given no indication that such waivers, amendments and/or standstills would be forthcoming.

The Directors expect that the Company would also ask the Lenders to further amend the Existing Facilities to allow additional funding to be made available to the Group (either by the Lenders or by alternative finance providers) and/or seek alternative financing. The Directors believe that such amendments would only be agreed to by the Lenders, if at all, at a significant cost to the Group in the form of additional fees payable to the Lenders, increased interest payments and/or additional restrictions on, or commitments to engage in, corporate actions (such as the restriction of payment of dividends to Shareholders, acquisitions and disposals), which would adversely affect or delay implementation of the Company’s strategies.

The Directors are not confident that additional financing would be achievable, nor that the Lenders would be willing to continue to support the business in these circumstances and, therefore, the most likely outcome would be that the Shareholders would lose all or a substantial part of the value of their investments in the Company as a result of enforcement action taken by the Lenders.

Furthermore, in light of the undertaking provided by the Company under the 2021 WBS Amendments and Waivers to provide funding to the Borrower by way of additional equity in an amount at least equal to the amounts drawn under the Liquidity Facility, in the event that the Open Offer or the New Debt Package is not completed successfully, the Company would have insufficient funds available to provide such funding to the WBS Group. In such circumstances, Ambac and the Trustee will have the right to withdraw their respective consents to any amendments and waivers effected by the 2021 WBS Amendments and Waivers, the consequences of which are detailed in “—If the Open Offer is not completed successfully, absent alternative measures, the 2021 WBS Amendments and Waivers may be withdrawn or not come into effect such that the WBS Group will default under the WBS financing, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company” below.

If the Open Offer is not completed successfully, absent alternative measures, it is expected that the 2021 WBS Amendments and Waivers would be withdrawn or not come into effect such that the WBS Group will default under the WBS financing, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company

In November 2003, a subsidiary of the Company, Mitchells & Butlers Retail Limited (the Borrower) established a secured corporate debt financing structure (the WBS) pursuant to which Mitchells & Butlers Finance plc (the Issuer) was established to issue secured notes, the proceeds of which were on-lent to the Borrower under an issuer/borrower facility agreement (the Issuer/Borrower Facility Agreement) which imposes certain covenants on the Borrower and its immediate parent company (the WBS Group). The Borrower must dedicate a portion of the cash flow (which amounted to £197 million in FY19, the last full year prior to the COVID-19 pandemic) generated from the restaurants, pubs and bars owned by the WBS Group (the WBS Estate) to service its debt obligations under the Issuer/Borrower Facility Agreement which the Issuer then uses to make payments in respect of the issued notes.

16 been unable to comply with a number of the covenants set out in the Issuer/Borrower Facility Agreement. In June 2020, Ambac Assurance UK Limited, as controlling creditor, (Ambac) and HSBC Trustee (C.I) Limited, as WBS trustee, (the Trustee) granted certain amendments and waivers in respect of the WBS financing (the 2020 WBS Amendments and Waivers) including waivers of non-payment events of default arising as a result of failure by the Borrower to pay its full debt service to the Issuer for the loan payment dates in June 2020 up to and including December 2020 and a waiver of the requirement to comply fully with the Debt Service Covenant up to and including April 2021. However, given the continuing impact of the COVID-19 pandemic and the ongoing measures requiring closures of, and restrictions on operations within, the WBS Estate, the Borrower requires extensions to, and further modifications in respect of, the 2020 WBS Amendments and Waivers so as to address further breaches of the Issuer/Borrower Facility Agreement which will occur upon the expiry of the 2020 WBS Amendments and Waivers.

The Company and the Borrower have therefore negotiated with Ambac and the Trustee further amendments and waivers in respect of the WBS financing (the 2021 WBS Amendments and Waivers). Under the terms of the 2021 WBS Amendments and Waivers, a number of the amendments/waivers apply with effect from 14 February 2021 (including amendments in relation to a 30-day suspension of business provision (effective as of 31 December 2020) and the waivers and amendments in relation to the failure by the WBS Group to pay in full the debt service over the next three quarters), whilst a number of other amendments and waivers thereunder will only come into effect upon receipt by the Company of the proceeds of the Open Offer (including amendments in relation to the debt service coverage ratio covenant, facilitating disposals of properties by the WBS Group and lifting a restriction on making acquisitions). To the extent that the Open Offer is not completed successfully by 30 April 2021, Ambac and the Trustee will be entitled to withdraw their respective consents to those amendments and waivers which came into effect on 14 February 2021, and the balance of the amendments and waivers under the 2021 WBS Amendments and Waivers would not come into effect at all.

Whilst the New Debt Package is not conditional on the 2021 WBS Amendments and Waiver, the 2021 WBS Amendments and Waivers (other than the amendments/waivers which apply with effect from 14 February 2021) are conditional upon entry by the Company into the New Debt Package and applying the New Debt Package to refinance the Existing Facilities other than the Santander CLBILS. Failure to satisfy this condition by 30 April 2021 will also entitle Ambac and the Trustee to withdraw their respective consents to the waivers in effect under the 2021 WBS Amendments and Waivers by 30 April 2021.

The absence and/or withdrawal of the 2021 WBS Amendments and Waivers would mean that the Borrower would immediately be in breach of a number of provisions of the Issuer/Borrower Facility Agreement with effect from such date of withdrawal. In particular, the waiver of the note payment date of 15 March 2021 and the waiver that allows for the deferral of the repayment of £9 million drawn on the Liquidity Facility and a further £50.7 million drawing in March 2021 would, following such withdrawal, be ineffective and the Group does not expect that the WBS Group would have sufficient funds to repay these amounts should they become immediately due and payable In addition, under the 2020 WBS Amendments and Waivers, the WBS financial covenants are currently fully waived until the test date at the end of July 2021. At that date, the relevant test would be in respect of the free cashflow to debt service for the preceding two quarters. In the absence of the 2021 WBS Amendments and Waivers, the test would be failed at that date, with an estimated free cashflow shortfall of £122 million. Such breaches would constitute events of default under the Issuer/Borrower Facility Agreement entitling Ambac to instruct the Trustee to declare the principal amount outstanding (£1,580 million as at 19 February 2021) and all other sums payable under the Issuer/Borrower Facility Agreement to be immediately due and repayable. In the event that all amounts outstanding under the Issuer/Borrower Facility Agreement were declared immediately due and repayable, certain other amounts may also become due and payable including, for example, termination amounts in respect of the related hedging arrangements (the mark- to-market value of which is currently around £250 million).

The Directors do not expect the WBS Group to have sufficient funds available to repay the expected amounts outstanding under the Issuer/Borrower Facility Agreement if they become due and payable. In the absence of being able to raise other debt in order to repay the amounts due under the Issuer/Borrower Facility Agreement, it would be open to Ambac and the Trustee to take enforcement action with respect to the Borrower Security (comprising the assets of the WBS Estate), including a sale of the WBS Group and/or the WBS Estate as a whole or piecemeal. Enforcement action by Ambac and the Trustee (by way of a sale of the WBS Group or otherwise) would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company.

17 If the Open Offer does not proceed, the Company and the Borrower would put in place an action plan to seek to avoid the possibility of enforcement action by the Trustee and Ambac, in light of the expected event of default under the WBS Group’s financing arrangements. The Directors expect that the Company and the Borrower would seek to obtain waivers, amendments and/or standstills, although Ambac and the Trustee have given no indication that such waivers, amendments and/or standstills would be forthcoming.

If the Open Offer does not proceed, the Directors expect that the Group would also look to obtain alternative financing so as to give Ambac and the Trustee comfort that the WBS Group will have sufficient financial support to be able to continue to run its business and service its debt obligations under the Issuer/Borrower Facility Agreement, such that Ambac and the Trustee agree not to take enforcement action with respect to the Borrower Security. To date, Ambac and the Trustee have given no indication that their consent would be forthcoming if the Open Offer is not completed. The Directors believe that such consent would only be provided by Ambac and the Trustee at significant cost to the Group in the form of additional fees payable to Ambac and possibly other secured creditors of the WBS Group and/or additional restrictions on, or commitments to engage in, corporate actions (such as the restriction of payment of dividends by the WBS Group to the wider Group, acquisitions and disposals), each of which would adversely affect or delay implementation of the Group’s strategies and may ultimately be unsustainable and, therefore, the most likely outcome would be that the Shareholders would lose all or a substantial part of the value of their investments in the Company.

The Odyzean Group has entered into an irrevocable undertaking with the Company to vote in favour of the Resolutions to be proposed at the General Meeting and to subscribe for its pro rata entitlement under the Open Offer and to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility. However, if the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement.

If the Underwriting Agreement is terminated, the Open Offer will not be successfully completed, as a result of which the New Debt Package will lapse and cease to be available to the Company and Ambac and the Trustee would be entitled to withdraw their respective consents to the waivers in effect under the 2021 WBS Amendments and Waivers by 30 April 2021. This would result in events of default under the Existing Facilities and the Issuer/Borrower Facility Agreement (which will occur on 10 April 2021 with respect to the Existing Facilities and, with respect the Issuer/Borrower Facility, would be expected to occur on 30 April 2021 (being the date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers in the event that the Open Offer has not been completed by then)). These events of default would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company.

For more information see the risk factors “—If the Open Offer, and consequently the New Debt Package, are not completed successfully, absent alternative measures, the Group would experience a liquidity shortfall, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company” and “—If the Open Offer is not completed successfully, absent alternative measures, the 2021 WBS Amendments and Waivers may be withdrawn or not come into effect such that the WBS Group will default under the WBS financing, which would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company” above.

The Group has negotiated a New Debt Package and the 2021 WBS Amendments and Waivers, the terms of which may limit its financial and operational flexibility

The Group is currently, and is expected to continue to be, subject to a number of covenants which limit the flexibility of the Group. If the Open Offer is completed successfully, the Existing Facilities will be refinanced by the New Debt Package. Under both the Existing Facilities and the New Debt Package, the Group is, or will be, subject to covenants, a breach of which may result in an event of default, and which limit the flexibility of

18 the Group in running its business and may have other operational impacts on the Group, including but not limited to:

- requiring the Group to use available cash flow to service its debt obligations and requiring a minimum level of liquidity to be maintained, thereby restricting the Group’s ability to pay dividends or other distributions to shareholders and limiting the Group’s ability to make acquisitions as well as capital expenditures or other investments in the Group’s business;

- limiting, among other things, its ability to borrow additional funds or raise capital in the future and increasing the costs of such additional financings;

- limiting the Group’s flexibility in planning for, or reacting to, changes in its business and the markets in which it operates;

- limiting the Group’s flexibility to enter into transactions between the WBS Group and the Unsecured Group;

- increasing the Group’s vulnerability to downturns in its business or economic and industry conditions;

- customers developing a negative perception of the Group’s solvency, which could adversely impact brand perception more generally; and

- placing the Group at a disadvantage compared to its competitors that may be less leveraged or restricted by financial covenants.

The Group has also agreed to certain restrictions in consideration for the 2021 WBS Amendments and Waivers including restrictions on the ability of the WBS Group to make payments of dividends to the wider Group and restrictions on the Company from making payments of dividends to its shareholders for so long as such amendments and waivers subsist.

Any of the above factors could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The WBS Group is subject to a number of covenants in respect of the WBS financing, including that its net worth in aggregate as at the end of each financial year will be equal to or greater than £500 million and its free cashflow debt-service coverage ratio (DSCR) will not, on any financial quarter date, in respect of the most recent relevant period or the most recent relevant year be less than 1.10:1. To the extent that the WBS Group is not able to continue to meet its debt obligations or satisfy the covenants in respect of the WBS financing, Ambac and the Trustee would be entitled to declare all amounts outstanding by the WBS Group under the WBS financing immediately due and payable. If the Group is unable to repay the amounts due under the WBS financing (or raise alternative debt in order to do so), it would be open to Ambac and the Trustee to take enforcement action with respect to the security granted by the WBS Group (comprising the assets of the WBS Estate), including a sale of the WBS Group and/or the WBS Estate as a whole or piecemeal.

In addition, the WBS Group must dedicate a portion of the cash flow (which amounted to £197 million in FY19, the last full year prior to the COVID-19 pandemic) generated by the WBS Estate to service debt obligations owing to all Borrower Secured Creditors under the WBS financing. The WBS Group may only apply excess available cash to make dividends, distributions or loan repayments to the Unsecured Group, subject to satisfaction of certain conditions including certain financial covenants. The WBS Group’s debt obligations and covenants could therefore affect its ability to assist or facilitate the Group in implementing its strategic priorities or in reacting effectively to changes in consumer demand or to increased competition. As a result of this WBS financing, as well the Group’s Existing Facilities and, once in force, the New Debt Package, the Group may be placed at a competitive disadvantage compared to competitors that have less debt and may be or become more vulnerable to general adverse economic and industry conditions.

19 The COVID-19 pandemic has had, and is expected to continue to have, a significant impact on the Group’s business, financial condition, results of operations and prospects

The Group’s business has been impacted significantly by the COVID-19 pandemic, which has resulted in the Group’s entire estate of restaurants, pubs and bars being closed for significant periods of time. The Group had a cash balance of £113 million as at 16 January 2021. On 18 January 2021, the Company and the trustees agreed to a deferment of deficit contributions from January and February to March with immediate effect, and, subject to certain conditions, the two deferred instalments from January and February and the March instalment may be further deferred to April. Taking this into account, from 1 January 2021 through to the date of this document, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. The proportion of the Group’s estate that has been closed has varied over the course of the pandemic due to the periodic imposition of mandatory national or local lockdowns in the countries in which the Group operates. While closed, the Group’s restaurants, pubs and bars still incur costs (including utilities, fixed charges against certain equipment such as dispense gas equipment, licence and insurance costs and rent) while not generating any revenue. The Group has also been required to change the operations of its restaurants, pubs and bars from time to time due to the COVID-19 pandemic in all of the jurisdictions in which it operates, although to a different extent and for varying time periods depending on the relevant local restrictions in each jurisdiction. These measures include, among others, reducing capacity due to the implementation of social distancing measures, limits on the number of customers per group, mandatory curfews, the requirement for full table service, the cessation of self-service operations (such as salad bars and buffets) and live music events, mandatory mask wearing and the closure of indoor play areas, all of which further negatively impacted trade.

The Group has also been taking, and is continuing to take, steps to mitigate the impact of the COVID-19 pandemic on its business. These include placing over 99 per cent. of UK employees on furlough during the lockdown periods, reducing operating costs to the extent possible, halting all discretionary capital expenditure, including its development programme, as part of a broader cash management plan, working to sell stock with a short shelf life at or below cost and, where this has not been possible, donating food stock items to charitable institutions to the extent practicable. During the first national lockdown in the United Kingdom, with the Group’s sites closed from 20 March 2020 to 4 July 2020, the Group incurred stock losses of £9 million. In the second and third national lockdowns, with the Group’s sites closed from 5 November 2020 to 2 December 2020 and from 30 December 2021 to the date of this document, the Group incurred stock losses of £2 million. In addition, during the first national lockdown, the Executive Committee’s and the Board’s pay was reduced by 40 per cent. and the pay of other members of the leadership team was reduced by 30 per cent. However, these measures will not be sufficient to offset completely the full impact of reduced sales due to the COVID-19 pandemic, which will have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The full impact of the COVID-19 pandemic will depend on a number of factors, such as the duration of the pandemic, the severity of any current infection rates and subsequent waves of infection, government initiatives to limit the spread of the virus, the length of time it takes to effectively vaccinate the general population and the extent of macroeconomic measures introduced by authorities in response. The effectiveness of macroeconomic measures (including government stimulus packages, business rates holidays, VAT concessions on food and non-alcoholic drink and measures introduced by central banks) will also influence the impact that the COVID-19 pandemic will have on the economy, customer behaviour and ultimately the Group. If the UK Government’s furlough scheme (which, when the estate was fully closed from March 2020 to June 2020 covering three four-week payroll periods, resulted in the Group receiving on average £34 million per four-week payroll period by way of furlough scheme salary and wage cost support payments) is not extended past its current end date of 30 April 2020, the Group will be responsible for employee salary and wage costs during any subsequent national or local lockdowns, which would increase the Group’s costs and may require redundancies. In addition, once reopened, the Group in the future may again be forced to close again some or all of its restaurants, pubs and bars and any social distancing measures that remain in place once sites are reopened will continue to have an adverse effect on the Group’s business. The Group’s sites in cities may also recover more slowly than its sites in suburban areas, as office workers may be slow to return to work. There is currently limited clarity in relation to these factors.

Even after the COVID-19 pandemic has passed, the impact of this pandemic on customer behaviour and their preferences may continue in the medium to longer-term. As restaurants, pubs and bars reopen, customers may have a different attitude to eating out, with health and safety at the forefront of priorities, and as a result may prefer in-home dining and may reduce their visits to the Group’s restaurants, pubs and bars. Customers may

20 want greater insight into operating practices, and food supply chain information. In addition, some customers may not follow the measures put in place to restrict the spread of the COVID-19 virus, potentially putting the Group’s employees and other customers at risk.

Any of the foregoing, including a prolonged period of national and/or regional restrictions, including requirements that the Group keep closed a material number or all of its restaurants, pubs and bars, as well as any resulting deterioration in general economic conditions or change in customer behaviour, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Changes in customer discretionary spending and general economic conditions could have a material adverse effect on the Group’s business, financial condition and results of operations

The Group’s sales and profitability are strongly correlated to customer discretionary spending, which is influenced by general economic conditions, unemployment levels, increased personal debt levels, the availability of discretionary income and customer confidence, particularly by customers living in the communities in which its restaurants, pubs and bars are located. As at 26 September 2020, 97 per cent. of the Group’s total number of restaurants, pubs and bars were based in the United Kingdom. The Group is therefore particularly impacted by economic conditions and changes in customer habits in the United Kingdom. Soft or weakening economic conditions in the United Kingdom, or in any of the areas in which its restaurants, pubs and bars are located, may cause customers to curtail discretionary spending, which in turn could reduce the Group’s sales and have a material adverse effect on its business, results of operations, financial condition and prospects.

Attendance at the Group’s restaurants, pubs and bars has in the past and may in the future decline during recessionary periods when the average level of disposable income tends to be lower or when customer confidence is low. Purchasing food and drink items at restaurants, pubs and bars represent discretionary purchases. Depressed consumer spending in the United Kingdom and Germany may also result in fewer discretionary purchases by customers which would lead to a decline in sales. These events can also affect the Group’s suppliers and partners, increasing its cost base and adversely affecting revenue. A significant decline in the global economy or in customers’ confidence could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Food safety and the perception by the Group’s customers and the general public that the Group’s products are safe are essential to the Group’s image and business. The Group is subject to food safety risks, and in particular product contamination and the potential cost and disruption of a food safety incident. The Group maintains systems designed to control food safety and sourcing risks and, because the Group could be implicated by the failure of any of its suppliers to comply with such food safety systems, requires each of its suppliers to also maintain such systems. See the risk factor entitled “—Failure by third-party suppliers of raw materials to comply with food safety, environmental or other regulations may disrupt the Group’s supply of certain products and adversely affect its business” below for more information. While the Group endeavours to control the risks related to product quality, security and sourcing through the implementation of, and strict adherence to, the Group’s quality standards, the Group cannot guarantee that such risks will not materialise, that it will not be subject to claims or lawsuits relating to an actual or alleged illness or injury stemming from product contamination or an allergic reaction, or that it will not suffer a loss in customer confidence in the safety and quality of its products and reputational damage. Further, unmanaged exposure through adverse press commentary and user-generated content platforms, such as Twitter and TripAdvisor, may increase the impact of reputational matters.

The Group’s products must also comply with strict national and international hygiene regulations. The Group routinely conducts inspections of the Group’s restaurants, pubs and bars. A number of these inspections are unannounced to ensure that compliance is consistent at all times. The inspections assess the risk of all of its raw materials, storing and cooking processes and prepared dishes for both microbiological and non- microbiological (such as foreign bodies) food safety risks. In addition, the Group is subject to inspection by food safety and other authorities, as well as independent bodies, for compliance with applicable food laws and standards. Despite the precautions the Group undertakes, should any non-compliance with food safety

21 regulations be discovered during an inspection, authorities may temporarily shut down the affected restaurant, pub or bar and/or levy a fine in respect of such non-compliance.

The Group is also subject to risks in relation to potential claims for allergens and concerns over food quality and safety affecting the Group or the food industry generally, including risks posed by widespread contamination, evolving nutritional and health-related concerns and public apprehension over the robustness of ingredient sourcing and food preparation processes. See “—The Group’s operations are subject to the risk associated with litigation from customers, employees and others in the ordinary course of business” for more information.

Additionally, the Group’s customers may also decide to stop visiting the Group’s restaurants, pubs and bars due to product quality or taste and/or may complain about the quality of the food, which could result in lower attendance at the Group’s restaurants, pubs and bars and the Group having to refund the customer’s purchase and/or compensate the customer for loss of sales. In addition, whilst the Group operates a wide range of brands, any risks, whether actual or perceived, or negative publicity associated with the restaurant, pub or bar industry as a whole could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group operates in a competitive industry

The Directors believe that the restaurant, pub and bar industry is highly competitive with respect to price, service, location, food and drink offerings and food quality, and there are some well-established competitors with greater financial and other resources than the Group. Some of the Group’s competitors could use their significant resources to increase their marketing, develop new products or reduce their prices, which could negatively impact the Group’s ability to compete. There is also active competition for management personnel as well as attractive suitable restaurant sites. In the United Kingdom, the market is fragmented with both local and national competitors including, in the restaurant market, the Restaurant Group, the Big Table Group (formerly known as Casual Dining Group), the Azzurri Group and Pizza Express plc and, in the pubs and bar market, include Greene King, Marston’s plc, Young & Co’s Brewery plc, Stonegate Pub Company, JD Wetherspoon plc, Fuller Smith & Tuner plc and Loungers plc. In Germany, the Group’s competitors in the bar and restaurant market include Cafe & Bar Celona, Cafe Extrablatt and other operators with a similar offering. To a lesser extent, the Group also competes for customers with quick service restaurants (such as McDonald’s and KFC), ‘‘fast casual’’ independent and chain restaurants (such as Nando’s), other casual eating and drinking establishments (such as coffee shops) and convenience and grocery stores.

Failure to provide a positive customer experience could adversely affect the Group’s ability to compete. A consistent and good customer experience is vital to driving customer demand and loyalty and supports the Group’s ability to premiumise its offering.

In addition, online delivery platforms, such as Just Eat, Uber Eats and Deliveroo are becoming increasingly popular as more customers choose to order food online for home delivery, which in turn may reduce attendance at the Group’s restaurants, pubs and bars. This trend, however, whilst still relatively modest, has grown and, as at 7 November 2020, 470 of the Group’s sites were established with online delivery platforms with more expected to become involved once the business re-opens following the closure of the estate in January 2021. However, it is not possible to accurately predict the long-term effects of the increasing demand for dine-at- home food deliveries on the restaurant industry. If the growth of online delivery platforms reduces customer demand for the dining-out experience and if the Group is not able to compensate for this by sufficiently exploiting the sales opportunities afforded by online delivery platforms, this could have a material adverse effect on its business, results of operations, financial condition and prospects.

This competition affects the Group’s pricing strategies and margins. Its ability to compete will depend on the success of its plans to attract customers, respond to customer preferences, manage the complexity of its restaurant operations, respond to its competitors’ actions, including their promotional activities, and retain managerial staff. Any erosion of the Group’s competitive position could have a material adverse effect on its business, results of operations, financial condition and prospects.

Failure to respond to changes in customer preferences could adversely affect the Group’s business

The success of the Group’s business depends on the continued popularity of the range of brands the Group offers and its ability to predict, identify and interpret demand, to anticipate the changing tastes and dietary habits of customers and to introduce successful new food and drink offerings to meet their needs. For example,

22 in recent years customers are increasingly interested in food prepared with more healthy, fresh and sustainable ingredients, as a result of which the Group has introduced new recipes and sourced more high quality ingredients at an increased cost. Successfully introducing innovative offerings that reflect customers’ preferences on a regular basis is important to the Group’s ability to maintain its level of sales. As a result, the future degree of market acceptance of any of the Group’s new food and drink offerings, which may be accompanied by significant levels of promotional expenditures, has had and is likely to have a material impact on the Group’s business, results of operations, financial condition and prospects.

A significant portion of the Group’s revenue is currently derived from the sale of beer to its customers. Sales of beer (by volume) in the United Kingdom have generally decreased over the years, principally as a result of the changing preferences and demographics of customers. While such declines in sales have generally been offset by increased demand for non-beer products such as other alcoholic beverages, non-alcoholic beverages, and food, there is no guarantee increased revenue from other channels will continue to offset completely the full impact of reduced beer sales.

The Group’s sales will decline if it is unable to accurately predict shifts in tastes and preferences or to introduce new and improved food and drink offerings to satisfy changing needs. In addition, given the variety of backgrounds and identities of customers, the Group must offer a sufficient array of offerings to satisfy the broad spectrum of customer preferences. The Group has for many years operated on the basis of regular menu changes for food which are typically annual or twice a year. The Group also regularly reviews its drinks range and makes changes to the drinks and beers offered. However, the popularity of the Group’s foods is impacted by a variety of factors, and could decline as a result of lifestyle, nutrition and health considerations. If the Group is unable to continue developing a sufficient range of new products or if customer preferences shift away from the Group’s product offerings, it could become less competitive, which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The prices of the raw materials and drinks that the Group and its suppliers use are subject to fluctuations in price. Such fluctuations are attributable to, among other things, inflation, changes in the supply and demand of crops or other commodities, the weather and growing conditions, fuel prices and government-sponsored agricultural and livestock programmes, food legislation, exchange rates and/or production costs and uncertainty of supply. In particular, the availability and the price of fresh produce and other agricultural commodities, including dairy, oils, meat and seafood, can be volatile. Additionally, epidemics in animal populations (such as variants of the swine flu) and local, national or international quarantines can also adversely affect commodity prices in the long- and short-term. Government export enhancement programmes can also have a material effect on commodity prices. These fluctuations may adversely affect the Group’s suppliers, who could be forced to raise their prices for the Group’s products when renegotiating supply contracts or earlier if not contracted.

The Group and its suppliers use significant quantities of agricultural products provided by non-exclusive third- party suppliers. The Group buys from a variety of producers and manufacturers and alternative sources of supply are generally available. However, the Group has limited ability to hedge against or avoid the adverse effects of pronounced, sustained price increases across the spectrum of its raw material suppliers. The Group attempts to reduce its exposure to price fluctuations in the supply chain by varying contract lengths, reducing exposure on higher cost items by promoting alternatives on its menu and by switching country of origin. However, these measures may not succeed or may not be sufficient to offset price increases. In addition, the Group’s ability to pass on higher costs related to inflation is limited due to customers’ price sensitivity, in particular in the Group’s mainstream brands. The Group may have to absorb changes to its costs, which in turn impacts its gross margins.

In addition, a decrease in the value of the pound against the euro, as well as general volatility in currency exchange markets since the Brexit referendum in July 2016, have caused the price of raw materials purchased in pounds to increase. See “–The United Kingdom’s withdrawal from the European Union could adversely affect the Group” below for more information.

Any of the forgoing events or any other event leading to price increases or scarcity of ingredients required for the Group’s products could increase the Group’s costs and disrupt its operations, or negatively impact demand

23 for its meals and drinks if it passes on such price increases on to customers, and subsequently could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Company may have difficulties implementing its growth strategy, which could have a material adverse effect on the Group’s business and results of operations

The Company’s ability to increase its revenue and pursue growth and development objectives depends on its success in carrying out its growth strategy, which includes investment of capital to improve the amenity of the Group’s trading sites, optimising the balance of brands across the Group’s estate and enhancing the Group’s digital strategy.

Due to the COVID-19 pandemic, the Group has halted all discretionary capital expenditure, including the Group’s Ignite programme, a wide range of management improvement initiatives, as a result of which certain key pillars of the Group’s growth strategy have not been realised on the anticipated timetable. The Group’s ability to restart the Ignite programme either in part or in full will depend on the extent of the full impact of the COVID-19 pandemic. The full impact of the COVID-19 pandemic will depend on a number of factors, such as the duration of the pandemic and the severity of any current infection rates and subsequent waves of infection. See the risk factor entitled “-The COVID-19 pandemic has had, and is expected to continue to have, a significant impact on the Group’s business, financial condition, results of operations and prospects” above for more information.

A number of factors may affect the achievement of the Company’s strategy, including, among others, demand for its restaurants, pubs and bars and its ability to obtain funding. There can be no assurance that the Company will be able to fulfil its strategy within the anticipated timeframe or at all. In the event that the Group continues to grow, it will have to react and adapt to the changing business environment, including the increasing prevalence of online delivery platforms. In addition, the costs associated with the pursuit of the Company’s growth strategy, whether successful or not, may cause a decrease in the Group’s short-term profitability or an increase in the Group’s indebtedness. Furthermore, the time required to pursue its growth strategy could divert management’s attention from other business concerns.

If the Company fails to realise its strategic objectives in full or in part and in a timely manner, or if the underlying assumptions on which such objectives are based prove to be incorrect, its ability to increase its revenue and profitability as well as its ability to respond to competitive pressures could suffer, which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Damage to the image and reputation of the Group could adversely impact the Group’s financial results and operations

The Group’s success in the restaurant, pub and bar industry depends partially on the Group’s ability to maintain its image and reputation. The image and reputation of the Group’s brands or operating formats may be impacted for various reasons including employee relations or litigation and complaints from customers or regulatory authorities resulting from quality failure, illness, injury or other health concerns. In addition, customers are becoming increasingly concerned about allergens and food sensitivities and negative perceptions, whether justified or not, of the safety of the Group’s food products may impact customers’ decisions, including which restaurants, pubs or bars they frequent. See the risk factor entitled “-Adverse developments with respect to the safety or the contents of the Group’s food and/or the food industry in general may damage the Group’s reputation, increase its costs of operations or decrease demand for its products”.

Adverse publicity, whether justified or not, or allegations of quality issues, even if false or unfounded, could tarnish the Group’s reputation and cause its customers to switch to competitors. In addition, user-generated content platforms, such as Twitter and TripAdvisor, makes it easier for false or unfounded allegations to adversely affect the Group’s brand image and reputation.

The Group may have difficulty finding and integrating further acquisitions

A number of the Group’s restaurants, pubs and bars have been acquired by the Group in a series of transactions involving the acquisition from third parties of companies owning a large number of such sites. Over time, the Group may look to acquire further restaurants, pubs and bars. There are certain legal, commercial and tax risks inherent in any such acquisition. In particular, the integration and consolidation of an acquisition requires substantial management time and resources and the post-acquisition combined entity may not be more

24 successful than the businesses would have been if they had remained independent. Anti-trust law and policy may, in addition, limit the Group’s ability to make acquisitions.

There can be no guarantee that the Group will continue to be able to find appropriate targets for acquisition at suitable prices or integrate future acquisitions successfully. Any such failure could have an adverse impact on the Group’s operating results, financial condition and prospects.

The Group’s supply chain could be subject to disruption

The Group is dependent on frequent deliveries of food and drink products that meet its specifications at competitive prices. These deliveries include fresh food, which is especially susceptible to problems arising from even short delays in the supply chain process. Shortages or interruptions in the supply of food and drink products caused by pandemics (such as the COVID-19 pandemic), Brexit, fire, flood or other natural disasters, terrorist activity, unanticipated demand, problems in production or distribution, disease or food-borne illnesses, inclement weather or other conditions could adversely affect the availability, quality and cost of ingredients and could adversely affect the Group’s business. In particular, if any of the Group’s distributors fail to meet their service requirements for any reason, it could lead to a material disruption of service or supply.

The Group has entered into agreements with all of its key suppliers. Termination of these agreements, variation of their terms or the failure of a party to comply with its obligations under these agreements could lead to a material disruption of service or supply. Additionally, challenging economic conditions could impair the solvency of the Group’s suppliers.

Any significant disruptions to the Group’s supply chain could result in food and drink shortages, thus leading to a loss of business, which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group relies on key third-party suppliers for the delivery of outsourced services to the Group

The Group depends on the provision of services by third parties including delivery services, information technology, web hosting and cloud-based services, human resource operations, technical support and insurance products. As a result, the Group’s operations are subject to a number of risks, some of which are outside of its control, including failure of a supplier or vendor to provide the required level of service, comply with the terms of an agreement with the Group; interruption of operations or increased costs in the event that a supplier or vendor ceases its business due to insolvency or other unforeseen circumstances; failure of a supplier or vendor to comply with applicable legal and regulatory requirements or the Group’s policies; and difficulty in managing the workforce, labour unrest or other employment issues. This in turn, may affect the Group’s relationship with its customers and damage its reputation. In addition, the Group may incur liability to third parties as a result of the actions of its supplier or vendor.

Outsourced services may cease to be provided, for example due to a contract period expiring or a contract being terminated, and there can be no guarantee that the chosen suppliers or vendors will be able to provide the functions for which they have been contracted. Although the Group may replace suppliers or vendors or decide to perform functions itself, the Group cannot ensure that such substitution can be accomplished in a timely fashion or without significant costs or disruption to its operations. Any failure of counterparties to deliver the contracted services could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects, particularly if a disruption occurs during peak trading periods, including during the Christmas and New Year period, key dates such as Mothering Sunday, Easter, bank holiday weekends and the summer months.

The Group has a high proportion of fixed overheads and variable revenues

A high proportion of the Group’s operating overheads and certain other costs remain fixed even if its revenues drop. The expenses of owning and operating a restaurant, pub or bar, which include (among other expenses) employee costs, rent and service charges for leased sites, business rates, licensing, insurance and utilities, are not significantly reduced when circumstances such as market and economic factors and competition cause a reduction in revenues. Accordingly, a significant decline in the Group’s revenues in the long-term would have a disproportionately adverse effect on its cash flow and ability to make interest and principal payments on its debt, which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

25 The United Kingdom’s withdrawal from the European Union could adversely affect the Group

The effects of the United Kingdom’s exit from the European Union (Brexit) are currently uncertain and depend on the agreements the United Kingdom has made to retain access to EU markets. In FY20, approximately 30 per cent. of the Group’s food spend was sourced from EU countries. In addition, as at 26 September 2020, approximately 40,000 of the Group’s employees were located in the United Kingdom, 12.5 per cent. of whom were non-UK EU citizens.

Brexit may lead to legal uncertainty and potentially divergent national laws and regulations and could also adversely affect economic or market conditions in the United Kingdom. Worsening economic and market conditions in the United Kingdom could result in reduced demand for the Group’s products from its customers. In addition, regulatory regimes applicable to the Group may be affected by Brexit, including certain employment regulations, the right of EU citizens to work in the United Kingdom, tariffs, procurement and taxation. Any changes to the foregoing or other regulatory regimes could require the Group to develop new policies and procedures or reorganise its operations, any of which could increase the Group’s compliance and labour costs. In particular, the Group could experience employee shortages, increased labour costs and significant loss of talent if citizens of EU countries are not permitted to work in the United Kingdom after Brexit.

Additionally, changes in the terms of trade or additional border controls could increase the Group’s procurement costs. While the Group could attempt to source more of its supplies from inside the United Kingdom, certain of the Group’s raw materials are only readily available from EU countries, particularly during certain times of the year. In addition, there is an increasing risk of disruption to the Group’s supply chain given the expected delays at ports as a consequence of the end of the transition period for the United Kingdom’s departure from the European Union. The Group has sought to limit this disruption by agreeing arrangements with its suppliers for stock building, identifying alternative products available with short lead times and/or alternative suppliers who are available to supply, on short notice, goods which may become subject to supply disruption. As the Group’s trading businesses in the United Kingdom are presently subject to a national lockdown, it is not experiencing any such disruption at present. However, the Group cannot guarantee the measures taken will be sufficient to avoid any disruption to the supply chain once trading resumes.

The result of the Brexit referendum has also led to a decrease in the value of the pound against the euro, as well as general volatility in currency exchange markets. This has caused the price of raw materials purchased in pounds to increase. The Group’s ability to pass on higher costs related to inflation is limited due to customers’ price sensitivity. See the risk factor entitled “–The Group is vulnerable to fluctuations in the price and availability of raw materials and drinks. If the Group is unable to pass these price increases on to its customers, such fluctuations may have a material adverse effect on the Group’s cost of sales and gross profit” above for more information.

Any of the aforementioned possible effects of Brexit, and others that the Group cannot anticipate, could materially adversely affect the Group’s business, results of operations, financial condition and prospects.

Higher labour costs could adversely affect the Group’s business and future profitability

The Group competes with other businesses in the restaurants, pubs and bars industry for good and dependable employees. The hospitality industry is labour intensive and is known for having a high level of employee turnover given low hourly wages across the industry and the part-time composition of large parts of the workforce. The supply of such employees is limited and competition to hire and retain them may result in higher labour costs. Although the Group’s average employee turnover (approximately 81 per cent. in FY19, a year not impacted by the COVID-19 pandemic) is lower than the industry average of 92 per cent. of team member roles, there remains a consistent need to find new staff which creates additional costs. In addition, wage rates for a substantial number of the Group’s restaurant, pub and bar staff are at, or slightly above, the National Living Wage in the United Kingdom. Any future increase in the National Living Wage would increase the Group’s operating and employment costs. As the National Living Wage increases, the Group may be required to increase not only the wage rates of its National Living Wage employees but also the wages paid to the employees at wage rates that are above the National Living Wage.

In addition, as at 26 September 2020, approximately 40,000 of the Group’s employees were located in the United Kingdom, 12.5 per cent. of whom were non-UK EU citizens. Regulatory regimes applicable to the Group including certain employment regulations and the right of EU citizens to work in the United Kingdom may be affected by Brexit resulting in the need to find new staff at a potentially higher cost. See “–The United

26 Kingdom’s withdrawal from the European Union could adversely affect the Group” above for more information.

Increases in labour costs as a result of any of the foregoing factors could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group’s business may be impacted by weak sales during peak selling seasons

The Group’s business is subject to seasonal peaks. Historically, the most important trading periods in terms of sales, operating results and cash flow have been over the Christmas and New Year period, key dates such as Mothering Sunday, Easter, bank holiday weekends and the summer months. The Group incurs additional expenses in advance of these peak periods in anticipation of an increase in customers, including the cost of additional inventory, advertising and hiring additional employees. Due to COVID-19 restrictions, a substantial number of the Group’s sites were closed or operating at reduced capacity during peak selling seasons since the start of the pandemic. For example, only 393 sites in the Group’s estate were open as at 23 December 2020. As a result, in the 16 weeks ended 16 January 2021, sales on a like-for-like basis (calculated weekly for weeks 5 to 16) were 30.1 per cent. down on the prior year. See the risk factor entitled “-The COVID-19 pandemic has had, and is expected to continue to have, a significant impact on the Group’s business, financial condition, results of operations and prospects” above for more information.

If sales during peak seasons are significantly lower than expected for any reason, the Group may be unable to adjust its expenses in a timely fashion and may be left with a substantial amount of unsold food and drink which may be difficult to sell. At the same time, if the Group fails to purchase a sufficient quantity of food and drink, it may not have an adequate supply of products to meet customer demand, which could materially adversely affect its gross transaction value and, in turn, its results of operations.

The Group’s results are also affected by periods of abnormal, severe or unseasonal weather conditions which may impact attendance levels at the Group’s restaurants, pubs and bars. For example, the Group’s revenue was negatively affected by Anticyclone Hartmut (otherwise known as the “Beast from the East”) in February 2018 which caused heavy snow in the United Kingdom as a result of which customer visits to the Group’s sites declined resulting in estimated lost sales of approximately £12 million. The Group may be particularly affected by prolonged unseasonal weather conditions or temporary severe weather during one of the Group’s peak trading seasons, such as the Christmas and New Year period, key dates such as Mothering Sunday, Easter, bank holiday weekends and the summer months, which could have a material adverse impact on the Group’s business, results of operations, financial condition and prospects.

The Group relies on a limited number of key personnel to operate its business, and the loss of any of these personnel or the Group’s inability to attract new personnel could have a material adverse impact on the Group’s business

The Group’s success is significantly dependent on the services of its key employees, including members of senior management such as the Chief Executive Officer, Phil Urban, and Chief Financial Officer, Tim Jones. In addition, the Group’s future growth and success depend on its ability to attract, train, retain and motivate skilled managerial, sales, administrative, operating and professional and technical personnel. There is also active competition for skilled management personnel. While the Group has a loyalty and performance based bonus structure and long-term management and retention initiatives, the Group’s key personnel may leave for reasons beyond the Group’s control, such as family, health and other personal commitments. For example, at the time of publication of this document, the role of Divisional Director of the Pubs Division is vacant. Nick Crossley left this role on 12 February 2021. A process for recruitment of an internal candidate is ongoing. The loss of one or more of the Group’s key management or operating personnel, or the failure to attract and retain additional key personnel, could have a material adverse impact on the Group’s business, results of operations, financial condition and prospects.

The Group is exposed to fluctuations in the property market

Although the Group’s principal activity is not the holding of properties as an investment, the Group owned 1,355 freehold and long leasehold properties and 305 leasehold, managed properties as at 26 September 2020. A downturn in the UK property market may lead to a reduction in the Group’s freehold and long leasehold property values over time and there can be no certainty that property values would recover at any given time or at all. Following a full property valuation and impairment review undertaken in September 2020, the Group recognised an overall decrease in the book value of its estate of £208 million resulting in an overall book value

27 of £4,305 million in relation to property, plant and equipment for FY20. The Group subsequently identified a post-balance sheet event of a reduction of £43 million in the book value of property, plant and equipment, which is summarised in Note 5.4 of the FY20 Financial Statements, which are incorporated by reference into this document, resulting in an overall book value of £4,262 million in relation to property, plant and equipment. In addition, valuations of restaurants, pubs and bars are affected by the trading performance of the pubs, with poorer trading generally leading to lower valuations. The valuation of property and property-related assets is inherently subjective. As a result, valuations are subject to uncertainty. Moreover, all property valuations are made on the basis of assumptions which may not reflect the true position. In addition, the effects of the COVID-19 pandemic have disrupted activities across all real estate property markets, increasing uncertainties as to valuations which the Group’s property valuers need to take into consideration. As a consequence, the Group’s property valuers stated in their valuation report of the Group’s UK freehold and long leasehold properties that there is a material valuation uncertainty as to the value of the Group’s properties. There is also no assurance that valuations of the Group’s properties and property-related assets will reflect actual sale prices. In addition, there can be no certainty that if any property impairments were required to be made in the future pursuant to the Group’s accounting policies, the Group’s revaluation reserves would be sufficient.

During the course of the COVID-19 pandemic, a small number of the owners of the Group’s leasehold sites offered a holiday for rental payments. However, most have not agreed to such a proposal or have only deferred rental payments during the course of the pandemic. As a result, unless further deferrals can be negotiated, the Group will be responsible for paying rental costs for these sites while receiving no revenue or reduced revenue from these sites for significant periods of time due to mandatory closures or other COVID-19 restrictions (such as social distancing measures). The Directors believe that the Group’s restaurants, pubs and bars are generally situated in prominent, accessible properties with high footfall and/or high traffic flows and, as such, when the Group renews expiring leases, it may have to compete over desirable property sites with other businesses in the industry, some of which are considerably larger than the Group and have greater economic and financial assets. Competitive pressure for existing leases may result in, among other things, significant alterations to rental terms (including substantial increases in rent), the closure of restaurants, pubs and bars in desirable locations or failure to secure suitable alternative locations. In addition, the Group’s ability to open new restaurants, pubs and bars depends upon, among other things, the availability of sites that meet its criteria and its ability to negotiate lease terms or terms of purchase that meet its financial targets. See the risk factor entitled “–The Group may have difficulty finding and integrating further acquisitions” above for more information.

All of the above factors could have a material adverse impact on the Group’s business, results of operations, financial condition and prospects.

Any breakdown or failure in the Group’s information technology systems could result in a disruption in the Group’s business and could have a material adverse effect on its results of operations

The Group relies heavily on its information technology (IT) systems, including its point of sale IT platforms, to facilitate its ability to monitor and control its stock levels, assets and operations, adjust to changing market conditions and customer needs. Any significant disruptions or failure in these systems to operate as expected could, depending on the magnitude of the problem, adversely affect proper functioning of the Group’s business, at the point of sale and by limiting its capacity to effectively monitor and control its assets and operations, including its ability to provide expected service levels to customers and its delivery capabilities in a timely manner. Disruptions to electronic payment systems for prolonged periods may also negatively impact receipt of payments and lead to loss of revenues. In addition, the Group continues to make significant investments into its digital capability, including the ability of customers to make an order at the table on their phone. Therefore, the integration of new technologies, including third-party technology, is of importance to the Company’s strategy going forward, as well as its ability to cope with operational changes due to the COVID-19 pandemic. A failure to integrate new technology or provide adequate IT functionality could affect the proper functioning of the Group’s business or require additional capital expenditures.

In addition, the Group’s information technology systems may be subject to damage and/or interruption from power outages; computer, network and telecommunications failure; computer viruses; security breaches and usage errors by its employees. An internal or external security attack could lead to a potential loss of confidential information and disruption to the business’ transactions with customers and suppliers. For example, in 2017 the Group suffered an attack from the WannaCry ransomware virus which disrupted the Group’s operations for a short period of time. Although the Group’s cyber security systems were largely able to repel the virus and there was no loss of customer data, there is no guarantee the cyber security systems will be able to do so for future attacks. Third party specialists continue to be engaged to assess the appropriateness of IT

28 controls, including the risk of malicious or inadvertent security attacks. This includes penetration testing on a regular basis to detect weakness in the Group’s IT and cyber security. In the future, there can be no assurance that the Group will be able to maintain the level of capital expenditures necessary to support the improvement or upgrading of its IT infrastructure. Any failure to effectively maintain, improve or upgrade its IT infrastructure and management information systems in a timely manner or at all could have a material adverse effect on the Group’s business, financial condition, results of operations or prospects.

Direct privacy breaches or any failure to protect clients’ confidential information could harm the Group’s reputation and expose it to litigation

The Group is subject to a number of laws relating to privacy and data protection, including, in particular, the General Data Protection Regulation (Regulation (EU) 2016/679) (GDPR), the GDPR as it forms part of the law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 and relevant statutory instruments, the United Kingdom’s Data Protection Act 2018, similar laws in Germany and the EU Privacy and Electronic Communications Regulations. Such laws govern the Group’s ability to collect, use and transfer personal data, including relating to its customers and business partners, as well as any such data relating to its employees and others. The Group routinely transmits and receives personal, confidential and proprietary information (such as debit and/or credit card details of its customers) by electronic means and therefore relies on the secure processing, storage and transmission of such information in line with regulatory requirements. Therefore, the Group is exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, damaged or processed in breach of privacy or data protection laws which could lead to the imposition of fines or regulatory action, together with associated negative publicity. For example, breaches of the GDPR can result in fines of up to 4 per cent. of annual global turnover.

Any perceived or actual failure by the Group, including its third-party service providers, to protect confidential data or any material non-compliance with privacy or data protection or other consumer protection laws or regulations may harm its reputation and credibility, adversely affect revenue, reduce its ability to attract and retain customers, result in litigation or other actions being brought against the Group and the imposition of significant fines and, as a result, could have a material adverse effect on its business, financial condition, results of operations or prospects.

Risks relating to legal and regulatory issues

The Group’s operations are subject to the risk associated with litigation from customers, employees and others in the ordinary course of business

The Group is involved, on an ongoing basis, in litigation arising in the ordinary course of business. Claims of illness or injury relating to allergens, food quality or food handling or trips, falls and other accidents by customers or employees are common in the hospitality industry. Litigation may include class actions involving employee and other claims based on, among other things, discrimination, harassment, wrongful termination and wage, rest break and meal break issues, including those relating to overtime compensation. The Group may also incur additional liabilities as a freehold property owner (including environmental liability). Moreover, the process of litigating cases, even if the Group is successful, may be costly, and may approximate the cost of damages sought. These claims may also divert the Group’s financial and management resources from more beneficial uses. These actions could also expose the Group to adverse publicity, which might adversely affect the Group’s reputation and/or customer preference for the Group’s products. Litigation trends and expenses and the outcome of litigation cannot be predicted with certainty and adverse litigation trends, expenses and outcomes could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group is exposed to funding risks in relation to the defined benefits under its pension schemes

The Group operates a number of pension schemes in the United Kingdom and in Germany. In the United Kingdom, the Group operates the Mitchells & Butlers Pension Plan (MABPP) and the Mitchells & Butlers Executive Pension Plan (MABEPP). These plans are funded, HMRC approved, occupational pension schemes with defined contribution and defined benefit sections. The defined benefit section of the plans is now closed to future service accrual. In addition, the Group also provides a defined benefit workplace pension plan in line with the Workplace Pensions Reform Regulations.

In September 2019, the Company reached agreement on the triennial valuation of the Group pension schemes as at 31 March 2019, with a funding shortfall of £293 million (March 2016 valuation: £451 million shortfall).

29 The Company will continue to pay cash contributions of £45 million per annum indexed with retail price index (RPI) from 1 April 2016 until 2023, with an additional payment of £13 million into escrow in 2024 should such further funding be required at that time. During FY20, the Company and the trustees of its defined benefit schemes agreed to a suspension of contributions for the period from April to September 2020, with such contributions restarting in October 2020. The agreement allows for the suspended contributions to be added onto the end of the agreed recovery plan, such that these contributions will be made in the second half of FY23. On 18 January 2021, the Company and the trustees agreed to a deferment of deficit contributions from January and February to March with immediate effect, and, subject to certain conditions, the two deferred instalments from January and February and the March instalment may be further deferred to April. This represents a reduction in cash outgoings of approximately £4 million per month. Although the Group has agreed a deficit reduction contribution, the Group’s net liabilities under the MABPP and the MABEPP may be significantly affected by changes in the applicable discount rate, the expected return on the plan’s assets and changes in demographic variables. There can be no assurance that the Group’s net liabilities will not increase or that the Group will not incur additional liabilities relating to its pension plans. Such additional liabilities could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Compliance with existing laws and regulations or changes in any such laws and regulations could affect the Group’s business, financial condition and results of operations

The Group is subject to a variety of laws and regulations and it routinely incurs costs in complying with these laws and regulations. New laws or regulations or changes in existing laws and regulations, particularly those governing the restaurant, pub and bar industry or in other regulatory areas such as licensing reform, drinking and driving and smoking laws, gaming legislation, privacy, information security, labour and employment, competition, health and safety or environmental protection, may conceivably require extensive system and operating changes that may be difficult to implement and could increase the Group’s cost of doing business.

In addition, changes in laws and regulations, more stringent enforcement or alternative interpretation of existing laws and regulations in jurisdictions in which the Group currently operates can change the legal and regulatory environment, making compliance with all applicable laws and regulations more challenging. Changes in laws and regulations in the future could have an adverse economic impact on the Group by tightening restrictions, reducing its freedom to do business, increasing its costs of doing business, or reducing its profitability. Failure to comply with applicable laws or regulations can lead to civil, administrative or criminal penalties, including but not limited to fines or the revocation of permits and licences that may be necessary for the Group’s business activities. The Group could also be required to pay damages or civil judgments in respect of third- party claims.

Any of these developments, alone or in combination, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group is subject to increasingly stringent health, safety and environmental regulations, which could result in increased costs and fines, as well as the potential for damage to the Group’s reputation

As a supplier of food and drink products for human consumption, the Group is subject to health, safety and environmental regulations, including regulations promulgated and enforced by the UK, European and German local and national authorities. These directives and regulations relate to sanitation, alcoholic beverage control, the remediation of water supply and use, water discharges, air emissions, waste management, noise pollution, and workplace and product health and safety. The Group is also subject to stringent production, health, quality and labelling regulations. In addition, the Group is subject to regulations relating to asbestos in the workplace. Health, safety and environmental legislation in the UK, Europe and elsewhere has tended to become broader and stricter over time, and enforcement has tended to increase over time.

Any failure to comply with health and safety or environmental regulations may lead to increased costs and fines, as well as damage to the Group’s reputation. If health, safety and environmental laws and regulations are gradually changed in the future, the extent and timing of investments required to maintain compliance may differ from the Group’s internal planning and may limit the availability of funding for other investments or reduce the Group’s profitability if it is not possible for the Group to integrate the additional costs into the price of its products.

The Group’s restaurants, pubs and bars where its employees work contain hazards associated with food preparation, including large ovens, hot surfaces and sharp utensils. Accidents as a result of the food preparation process and future health claims actually or allegedly resulting from exposure to the food preparation process

30 may occur in its business. The Group could be subject to claims by government authorities, individuals and other third parties seeking damages for alleged personal injury or property damage resulting from such accidents or other such incidents. Any of these events could adversely impact the Group’s customers’ perception of it or its reputation. See the risk factor entitled “—Adverse developments with respect to the safety or the contents of the Group’s food and/or the food industry in general may damage the Group’s reputation, increase its costs of operation or decrease demand for its products” above for more information.

Further, the UK sentencing guidelines for health and safety and environmental offences, which came into effect 1 February 2016, established a tougher sentencing regime for companies that commit serious breaches of environmental, health and safety laws (including the Health and Safety at Work etc. Act of 1974 and the various health and safety regulations which sit under it, such as the Provision and Use of Work Equipment Regulations 1998 and the Construction (Design and Management) Regulations 2015). Should a company be found guilty of an offence under any relevant legislation, the penalties imposed will be significantly higher than in the past, potentially running into millions of pounds. Although it is believed that less serious offences and offences involving individuals and smaller organisations will be sentenced in broadly the same manner, offences committed by “very large” companies, such as the Group, involving a high degree of harm and culpability are expected to be sentenced more stringently with higher fines or penalties.

While the Group maintains insurance against certain potential health, safety and environmental risks, not all liabilities, including criminal and regulatory fines, can be covered. Under some of these laws and regulations, the Group could also be held liable for investigation or remediation costs resulting from contamination at properties that it owns or occupies, even if the contamination was caused by a party unrelated to the Group and was not the Group’s fault, and even if the activity causing the contamination was legal. The discovery of previously unknown contamination, or the imposition of new obligations to investigate or remediate contamination at the Group’s properties, could result in substantial unanticipated costs. In some circumstances, the Group could be required to pay fines or damages under these laws and regulations. Regulatory authorities may also require the Group to curtail operations or close facilities temporarily or permanently, including for the purpose of preventing imminent risks.

Although the Directors believe that the Group conducts its operations in a way that reduces health, safety and environmental risks and has in place appropriate systems for identifying and managing potential liabilities, there can be no assurance that the Group has identified and is addressing all sources of health, safety and environmental risks, or that such risks, if they result in losses, will be insured in part or at all.

There can be no assurance that the Group will not incur health, safety and environmental losses or that any losses incurred will not have a material adverse effect on the Group’s results of operations or financial condition. In addition, future changes in health, safety and environmental laws or regulations could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Failure by third-party suppliers of raw materials to comply with food safety, environmental or other regulations may disrupt the Group’s supply of certain products and adversely affect its business

The Group relies on third-party suppliers to supply raw materials used in the preparation of its meals, including meat, fresh produce, flour, eggs and dairy products (including cheese). Such suppliers, whether in or outside the United Kingdom, are subject to a number of regulations, including food safety and environmental regulations. In addition, the Group’s suppliers may be exposed to negative publicity in relation to the content of the raw materials and ingredients they supply to the Group. Failure by any of the Group’s suppliers to comply with regulations, allegations of compliance failure, claims of intentional or negligent contamination of raw materials and ingredients or prolonged and intense negative publicity may disrupt their operations. Disruption of the Group’s suppliers’ operations could disrupt its supply of product or raw materials, which could have a material adverse effect on the Group’s business, financial condition and results of operations. Additionally, actions the Group may take to mitigate the impact of any such disruption or potential disruption, including increasing inventory in anticipation of a potential production or supply interruption, could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Failure to obtain and maintain required licenses and permits or to comply with alcoholic beverage or food control regulations could lead to the loss of its food and alcoholic licenses and, thereby, harm its business

The Group’s restaurant, pubs and bar operations are subject to various local and national regulations, including those relating to the sale of food and alcoholic beverages. Such regulations are subject to change from time to time. The failure to obtain and maintain these licences, permits and approvals could adversely affect the

31 Group’s operating results. Licences may be revoked, suspended or denied renewal for cause at any time if governmental authorities determine that the Group’s conduct violates applicable regulations. Difficulties or failure to maintain or obtain the required licences and approvals could adversely affect its existing restaurants, pubs and bars and delay, or result in a decision to cancel, the opening of new restaurants, pubs and bars, and this could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

UK Government sponsored campaigns against excessive drinking, licensing reforms relating to the sale of alcoholic beverages and changes in drink driving laws may reduce demand for the Group’s alcoholic beverages

The sale of alcohol is critical to the profitability of the Group’s business. In FY19, uninterrupted by closure, drink sales (which includes both alcoholic and non-alcoholic drinks) represented 47.4 per cent. of the Group’s managed drink and food revenue. In recent years, increased social and political attention has been directed at the alcoholic beverage industry. This recent attention has focused largely on public health concerns related to alcohol abuse, including drinking and driving, underage drinking, and health consequences from the misuse of alcoholic beverages. In addition, there have been various well-publicised campaigns encouraging people to refrain from consuming alcohol for a period of time, such as the “Dry January” and “Go Sober for October” initiatives. If the social acceptability of alcoholic beverages were to decline significantly, sales of alcoholic drinks at the Group’s restaurants, pubs and bars, could decline significantly.

The UK Government from time to time considers initiatives to discourage alcohol consumption. One measure which has been debated by the UK Government involves the introduction of minimum prices per unit of alcohol, which has already been enacted in Scotland in May 2018 and in Wales in March 2020. If such measures, or similar measures, were to be implemented by the UK Government, then, notwithstanding that the Group currently supports measures for the responsible retailing of alcohol, the additional conditions imposed on pubs might impact the manner in which all pubs operate and could take effect regardless of the past record of individual pubs. Such measures may reduce the flexibility of the Group, its pub managers or its licensees to implement the business strategies that they consider to be most likely to maximise profitability, and accordingly could have a material adverse impact on the Group’s business, operating results, financial conditions and prospects.

The Group’s businesses are subject to licensing requirements relating to the sale of alcoholic beverages and these requirements are subject to change from time to time. Vendors of alcoholic beverages are subject to licensing and regulation by governmental and local authorities, pursuant to the UK Licensing Act 2003 and related laws and regulations in England and Wales and similar laws and regulations in Scotland, Northern Ireland and Germany. Alcoholic beverage control and licensing regulations relate to numerous aspects of the Group’s operations, including the hours of operation, the handling, storage and dispensing of alcoholic beverages and staff training and qualifications. Additional or more stringent requirements could be imposed on the Group’s operations in the future. To the extent that this increases costs or reduces the Group’s ability to sell alcoholic beverages, it could have a material adverse impact on the Group’s business, operating results, financial conditions and prospects.

Car drivers and passengers account for a significant proportion of the Group’s restaurant, pub and bar customers and any future legislation in respect of the legal blood alcohol limit for drivers in the countries in which the Group operates could affect trading in the Group’s rural and suburban pubs and may result in customers drinking less or frequenting pubs less often. This could lead to a reduction in revenues for certain pubs in the Group and lead to a decline in the Group’s overall income from alcoholic drink sales. An increased focus on the potentially harmful effects of alcohol may reduce sales of alcoholic beverages and could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Many of the Group’s pubs operate gaming machines. Any violation of or change in the laws regulating such machines could have a negative impact on the profitability of certain pubs in the Group

The Gambling Act 2005 came into force on 1 September 2007. There are explicit monetary limits on stakes and prizes, as well as new social responsibility provisions requiring close supervision of games. There have also been changes to the broader categories of machines permitted in alternative venues such as casinos, licensed betting offices, bingo halls, amusement arcades, family entertainment centres and motorway service stations that may increase the competitive threat to the Group’s gaming revenue. If the Group’s pubs were to violate the regulatory gaming rules or if any new rules regulating gaming machines were to reduce the number

32 of customers patronising the Group’s pubs and gaming machines, it could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

Risks relating to the Open Offer and the Shares

As announced on 15 February 2021, Piedmont Inc., Elpida Group Limited and Smoothfield Holding Ltd. (the Consortium) have been acquired by Odyzean Limited (which is jointly owned by certain investment vehicles that are respectively ultimately beneficially owned by (i) the family interests of Joseph C. Lewis, (ii) the family interests of John Magnier, (iii) the family interests of John Patrick McManus and (iv) the family interests of Derrick Smith) (Odyzean) and as such are now wholly owned subsidiaries of Odyzean (collectively the Odyzean Group). As a result, the Odyzean Group held approximately 55 per cent. of the Company’s issued share capital as at 19 February 2021, being the latest practicable date prior to the publication of this document. Therefore, the Odyzean Group possesses sufficient voting power to have a significant influence over all matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, and to delay, defer or prevent a change of control of the Company. The interests of the Odyzean Group may not always be aligned with those of other holders of Shares. The Odyzean Group has indicated that, in order to streamline decision-making, it intends to review the composition of the Board, which may result in fewer independent Non-Executive Directors and less focus on compliance with the UK Corporate Governance Code recommendations in the future. In particular, the Odyzean Group has indicated that it will disregard specific corporate governance expectations around tenure and that it expects the Board to focus on retaining and acquiring skillsets amongst the independent Non-Executive Directors that are required to optimise the development of the business going forward. The Odyzean Group has also indicated that the time and cost devoted by the senior management team to public company matters should be reduced.

In addition, the Odyzean Group has said that it intends to request that the Board focus on long-term, rather than short-term, shareholder value creation. The Odyzean Group believes the long-term success of the Company would be beneficial to all stakeholders, including its approximately 40,000 employees and its suppliers, lenders and shareholders. The Odyzean Group believes that this review could include consideration of the speed and nature of the existing Ignite investment programme and opportunities for acquisitions and partnerships. In order to support these initiatives, the Company may in the medium term (at least 12 months after the date of this document) need to raise additional capital through the issue of new shares. The Odyzean Group has also indicated that it would prefer the Company to prioritise debt repayment and investment in the Group’s businesses over the payment of dividends for the foreseeable future. See the risk factor entitled “-The Company does not currently pay dividends on the Shares and has agreed under the 2021 WBS Amendments and Waivers, the Santander CLBILS and the New RCF Agreement not to pay dividends until certain conditions are met.” below for more information. The Odyzean Group has indicated that it intends to work with the Board to ensure the remuneration structure for all levels of the management team remains fully aligned with both the strategy of the business and shareholder value maximisation over the long-term. Any changes to the current remuneration structure, if proposed, may run counter to listed company norms and benchmarking. The Odyzean Group has, however, confirmed that there are no immediate plans to propose or implement arrangements which are not consistent with the proposed remuneration policy.

As the Odyzean Group already holds a majority of the Company’s Shares, it is not required to make a takeover offer for all other Shares pursuant to Rule 9 of the Takeover Code, and is not prevented from acquiring additional Shares in the Company. The Odyzean Group has committed to take up its pro rata entitlement under the Open Offer and to subscribe for any Excess Shares made available and allocated to it under the Excess Application Facility. As a result, the percentage of the Company’s Shares which the Odyzean Group holds may increase following the Open Offer. Therefore, if no Qualifying Shareholders other than the Odyzean Group apply to subscribe for their Open Offer Entitlements and, as a result, the Odyzean Group is the only Shareholder that takes up the Open Offer, its shareholding will increase to up to a maximum of 67.6 per cent. of the Company’s Enlarged Share Capital. Any increase in the Odyzean Group’s shareholding would increase its voting power further and could result in the Odyzean Group having further significant influence over all matters requiring shareholder approval. In addition, under Listing Rule 9.2.15R, at least 25 per cent. of a company’s shares must be held in public hands. If in the future the Company ceases to be in compliance with this requirement, as a result of either the Odyzean Group or other Shareholders increasing the number of Shares

33 they hold, it will be necessary for the Company to approach the FCA in order to seek a waiver of the requirement for sufficient shares to be held in public hands.

As a result of the Odyzean Group holding over 30 per cent. of the Company’s shares, the Odyzean Group is considered to be a controlling shareholder for the purposes of the Listing Rules. The Company has requested that the Odyzean Group enters into a relationship agreement with the Company in compliance with the Listing Rules, which the Company has six months to put in place from the time at which the Odyzean Group became a controlling shareholder. A relationship agreement requires a controlling shareholder to: (a) only enter into transactions and arrangements with the company on an arm’s length basis and on normal commercial terms; (b) ensure it and its associates do not take any action which would prevent the company from complying with its obligations under the Listing Rules; and (c) not propose, and ensure its associates do not propose, any shareholder resolution which is intended to circumvent the proper application of the Listing Rules. The Odyzean Group has not entered into a relationship agreement with the Company for the purposes of the Listing Rules. If the Odyzean Group does not enter into a relationship agreement with the Company during such six month period, the Company will be required to disclose this in its annual report and any transactions entered into between the Company and members of the Odyzean Group will not be subject to certain exemptions from the related party rules set out in the Listing Rules. The Company would expect such enhanced oversight measures to apply until a relationship agreement was entered into. The Company may need to consider a transfer of its listing category from a premium listing to a standard listing if a relationship agreement that satisfies the Listing Rules is not entered into with Odyzean Limited, and potentially its owners, within six months of them having become controlling shareholders. If the Company moved to a standard listing this may have adverse consequences for the Company and its shareholders, such as exclusion from certain of the FTSE indices for listed shares.

Any of the foregoing factors could have an adverse effect on the trading price of the Shares.

The market price of the Shares could be subject to volatility

The market price of the Shares could be subject to significant fluctuations due to a change in sentiment in the market regarding the Shares (or securities similar to them), including, in particular, in response to various facts and events, including any regulatory changes affecting the Group’s operations, variations in the Group’s operating results and/or business developments of the Group and/or its competitors. Stock markets have from time to time experienced significant price and volume fluctuations that have affected the market prices for securities and which may be unrelated to the Company’s operating performance or prospects. Furthermore, the Group’s operating results and prospects from time to time may be below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the Shares.

An active trading market for the New Shares may not develop

Application has been made to admit the New Shares to trading on the London Stock Exchange’s main market for listed securities. It is expected that dealings in rights to acquire the New Shares on the London Stock Exchange’s main market for listed securities will commence at 8.00 a.m. on 12 March 2021. There can be no assurance, however, that an active trading market in the New Shares will develop.

A significant sale of Shares may adversely impact the market price of the Shares

Any sales of a substantial number of Shares in the market after the Open Offer, or the perception that such sales might occur, could depress the market price of the Shares. Although the Company does not have any plans to offer additional Shares within 12 months of the date of this document (other than pursuant to the Share Schemes), it is possible that the Company may decide to offer additional equity securities (over and above those issued pursuant to the Share Schemes) in the future. In particular, the Odyzean Group has said that in order to support possible future initiatives including the existing Ignite investment programme and opportunities for acquisitions and partnerships, the Company may in the medium term (at least 12 months after the date of this document) need to raise additional capital through the issue of new shares. See the risk factor entitled “-The Odyzean Group has a significant interest in the Company’s Shares, which may increase further as a result of the Open Offer, and it will be in a position to exert substantial influence over the Group and the Odyzean Group’s interests may differ from or conflict with those of other Shareholders” above for more information. An additional offering of Shares could have an adverse effect on the market price of the Shares.

34 The market price for the Shares may decline below the Offer Price and Shareholders may not be able to sell Shares at a favourable price after the Open Offer

The public trading market price of the Shares may decline below the Offer Price. Should that occur prior to the latest time and date for acceptance under the Open Offer, Qualifying Shareholders who exercise their rights in the Open Offer will suffer an immediate loss as a result. Moreover, following the exercise of their rights, Shareholders may not be able to sell their New Shares at a price equal to or greater than the acquisition price for those shares.

Investors in the New Shares may be subject to exchange rate risk

The New Shares are priced in pounds sterling. Accordingly, any investor outside the United Kingdom is subject to adverse movements to their local currency against pounds sterling. Any depreciation of the pounds sterling in relation to such foreign currency will reduce the value of the investment in the New Shares or any dividends in foreign currency terms, and any appreciation of the pounds sterling will increase the foreign currency terms of any such investment or dividends. In addition, such investors could incur additional transaction costs if they convert pounds sterling into another currency

Under the Santander CLBILS, the Company has agreed not to pay any external dividend until the Santander CLBILS is repaid. This is a requirement under the UK Government backed CLBILS. Under the New RCF Agreement, the Company has agreed not to pay any external dividend until the covenant testing date falling on 2 July 2022.

Future dividends will also be subject to the financial condition of the Group. The Company’s ability to pay dividends is limited under English company law, which limits a company to only paying cash dividends to the extent that it has distributable reserves and cash available for this purpose. As a holding company, the Company’s ability to pay dividends is affected by a number of factors, principally its ability to receive sufficient dividends from subsidiaries. The ability of these subsidiaries to pay dividends and the Company’s ability to receive distributions from its investments in other entities are subject to applicable local laws and regulatory requirements and other restrictions, including, but not limited to, applicable tax laws and covenants in some of the Company’s debt facilities. These laws and restrictions could limit the payment of dividends and distributions to the Company by its subsidiaries, which could restrict the Company’s ability to fund other operations or to pay a dividend to the Shareholders.

Shareholders who do not acquire New Shares in the Open Offer will experience dilution in their ownership of the Company.

If a Shareholder does not take up the offer of New Shares under the Open Offer, either because the Shareholder is in the United States or another jurisdiction where their participation is restricted for legal, regulatory or other reasons or because the Shareholder does not respond to the Open Offer by 11.00 a.m. on 10 March 2021, the expected latest time and date for acceptance and payment in full for that Shareholder’s Open Offer

35 Entitlements, or a Shareholder only takes up his or her Open Offer Entitlements in part, the Shareholder’s proportionate ownership and voting interests as well as the percentage that their Shares will represent of the total share capital of the Company will be further reduced.

Shareholders outside the United Kingdom may not be able to acquire New Shares in the Open Offer.

Securities laws of certain jurisdictions may restrict the Company’s ability to allow participation by Shareholders in the Open Offer. In particular, holders of Shares who are located in the United States may not be permitted to take up their entitlements under the Open Offer unless an exemption from the registration requirements is available under the Securities Act. The Open Offer will not be registered under the Securities Act. Securities laws of certain other jurisdictions may restrict the Company’s ability to allow participation by Shareholders in such jurisdictions in any future issue of shares carried out by the Company. Qualifying Shareholders who have a registered address in or who are resident in, or who are citizens of, countries other than the United Kingdom should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to acquire New Shares.

It may not be possible to effect service of process upon the Company or the Directors or enforce court judgments against the Company or the Directors.

The Company is incorporated in England and Wales and the rights of holders of Shares are governed by the Companies Act and by the Articles. These rights may differ from the rights of shareholders in non-United Kingdom corporations. In general terms, only a company may be the claimant in proceedings in respect of wrongful acts committed against it. In addition, it may be difficult for Overseas Shareholders to effect service of process outside the United Kingdom or to prevail in a claim against the Company under, or to enforce liabilities predicated upon, non-United Kingdom securities laws. An Overseas Shareholder may not be able to enforce a judgement against some or all of the Directors. The majority of its Directors are citizens or residents of England. As a result, it may not be possible for investors outside of the United Kingdom to effect service of process outside the United Kingdom against the Company or the Directors or to enforce against the Directors judgements of courts of the Overseas Shareholder’s country of residence based on civil liabilities under that country’s securities laws. An Overseas Shareholder may not be able to enforce any judgements in civil and commercial matters or any judgements under the securities laws of countries other than the United Kingdom against the Directors who are residents of the United Kingdom or countries other than those in which judgement is made. In addition, English or other courts may not impose civil liability on the Directors in any original action based solely on non-United Kingdom securities laws brought against the Company or its Directors in a court of competent jurisdiction in England or other jurisdictions.

36 IMPORTANT INFORMATION

General

The Company will update the information provided in this document by means of a supplement if a significant new factor that may affect the evaluation by prospective investors of the offer occurs after the publication of this document or if this document contains any material mistake or substantial inaccuracy. This document and any supplement will be subject to approval by the FCA (as competent authority under the UK Prospectus Regulation) and will be made public in accordance with the Prospectus Regulation Rules. If a supplement to this document is published prior to Admission of the New Shares, investors will have the right to withdraw their applications for New Shares made prior to the publication of the supplement. Such withdrawal must be made within the time limits and in the manner set out in any such supplement (which will not be shorter than two clear Business Days after publication of the supplement).

Market and industry information

Unless the source is otherwise stated, the market, economic and industry data in this document constitute the Directors’ estimates, using underlying data from independent third parties. Market data and certain industry data and forecasts included in this document have been obtained from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications and surveys, including the Coffer Peach Business Tracker and the British Beer and Pub Association.

The Company confirms that all third-party data contained in this document has been accurately reproduced and, so far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where third-party information has been used in this document, the source of such information has been identified. While industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, the accuracy and completeness of such information is not guaranteed. The Company has not independently verified any of the data from third-party sources, nor has the Company ascertained the underlying economic assumptions relied upon therein. Similarly, internal surveys, industry forecasts and market research, which the Company considers to be reliable based upon the Directors’ knowledge of the industry, have not been independently verified. Statements as to the Group’s market position are based on recently available data.

Cautionary note regarding forward-looking statements

This document includes certain forward-looking statements, forecasts, estimates, projections and opinions (Forward-looking Statements). When used in this document, the words “anticipate”, “believe”, “estimate”, “forecast”, “expect”, “intend”, “plan”, “project”, “may”, will” or “should” or, in each case, their negative or other variations or similar expressions, as they relate to the Group, its management or third parties, identify Forward-looking Statements. Forward-looking Statements include statements regarding the Group’s business strategy, objectives, financial condition, results of operations and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of the Directors (including based on their expectations arising from pursuit of the Company’s strategy), as well as assumptions made by the Directors and information currently available to the Company.

Although the Company considers that these beliefs and assumptions are reasonable, by their nature, Forward- looking Statements involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. These factors, risks, uncertainties and assumptions could cause actual outcomes and results to be materially different from those projected. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. No representation is made or will be made that any Forward-looking Statements will be achieved or will prove to be correct. These factors, risks, assumptions and uncertainties expressly qualify all subsequent oral and written Forward-looking Statements attributable to the Group or persons acting on its behalf.

None of the Company, the Directors or the Underwriters assumes any obligation to update any Forward-looking Statement and disclaims any obligation to update their view of any risks or uncertainties described herein or to publicly announce the result of any revisions to the Forward-looking Statements made in this document, except

37 as required by law (including, for the avoidance of doubt, the Prospectus Regulation Rules, the Market Abuse Regulation, the Listing Rules and Disclosure Guidance and Transparency Rules).

In addition, this document contains information concerning the Group’s industry and its market and business segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the industry, and the Group’s market and business segments, will develop. These assumptions are based on information currently available to the Company. If any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While the Company does not know what effect any such differences may have on the Group’s business, if there are such differences, they could have a material adverse effect on the Group’s future results of operations and financial condition.

The contents of this “Cautionary note regarding forward-looking statements” section in no way seeks to qualify or negate the statement relating to the Group’s working capital set out in paragraph 14 of Part X – Additional Information.

Presentation of Financial Information

Unless otherwise indicated, the historical and other financial information presented in this document has been extracted without material adjustment from the audited consolidated financial statements of the Company for FY18, FY19 and FY20, which are presented in pounds sterling and have been prepared in accordance with IFRS as adopted by the European Union.

IFRS16 Implementation

The Group adopted IFRS16 Leases from 29 September 2019, the impact of which is summarised in Notes 1 and 5.3 of the FY20 Financial Statements, which are incorporated by reference into this document. The Group has applied the cumulative catch-up (‘modified’) transition method and, as prescribed by the standard, comparators have not been updated.

Pro Forma Financial Information

In this document, any reference to “pro forma” financial information is to information which has been extracted without material adjustment from the unaudited pro forma statement of net assets of the Group contained in Section B of Part VIII – Unaudited Pro Forma Financial Information (the Unaudited Pro Forma Financial Information). The Unaudited Pro Forma Financial Information has been prepared to illustrate the effect of the Open Offer on the net assets of the Group as if the Open Offer had taken place on 26 September 2020.

Non-IFRS Information

This document contains certain financial measures that are not defined or recognised under IFRS, including EBITDAR, net debt (excluding lease liabilities), adjusted operating profit and like-for-like sales. These measures are not measures of financial performance under IFRS and should not be considered as alternatives to other indicators of the Group’s operating performance, cash flows or any other measure of performance derived in accordance with IFRS. Information regarding these measures is sometimes used by investors to evaluate the efficiency of a company’s operations and its ability to employ its earnings toward repayment of debt, capital expenditures and working capital requirements. There are no generally accepted principles governing the calculation of these measures and the criteria upon which these measures are based can vary from company to company. These measures, by themselves, do not provide a sufficient basis to compare the Company’s performance with that of other companies and should not be considered in isolation or as a substitute for operating profit or any other measure as an indicator of operating performance, or as an alternative to cash generated from operating activities as a measure of liquidity.

EBITDAR

The Group defines EBITDAR as profit for the year before finance costs, finance income, taxes, depreciation, amortisation and rent costs. The Company views EBITDAR as a meaningful measure of the Group’s operating performance and debt servicing ability without regard to amortisation and depreciation methods which can differ significantly. In addition, the ratio of the EBITDAR of the Unsecured Group to net rent payable plus interest for each of the two preceding quarterly testing dates is a financial covenant under the Existing Facilities. See paragraph 10.1.2(a) of Part X – Additional Information. The Company believes that EBITDAR is therefore helpful for understanding the performance of the business of the Group.

38 52 weeks ended 29 September 28 September 26 September 2018 2019 2020(1) (£ millions) Revenue ...... 2,152 2,237 1,475 Operating costs before depreciation, amortisation and movements in the valuation of the property portfolio ...... (1,736) (1,820) (1,219) Share in associates’ results ...... - - (1) Net profit arising on property disposals ...... 1 1 - EBITDA ...... 417 418 255 Rental costs ...... 57 58 1 EBITDAR ...... 474 476 256

Net debt (excluding lease liabilities)

The Group defines net debt as cash and cash equivalents and cash deposits, net of borrowings. The Group presents net debt to analyse the Group’s liquidity and financial position by providing additional information in respect of the Group’s ability to meet its financial obligations at any given period. Furthermore, net debt is widely used by certain investors, securities analysts and other interested parties as a supplemental measure of liquidity and financial position.

As at 29 September 2018 28 September 2019 26 September 2020 (£ millions) Cash and cash equivalents ...... 122 133 173 Overdraft ...... - - (15) Cash and cash equivalents as presented in the cash flow statement(1) ...... 122 133 158 Other cash deposits ...... 120 - - Securitised debt ...... (1,830) (1,752) (1,646) Term loan(2) ...... - - (100) Unsecured revolving credit facility ...... - - (10) Liquidity facility ...... (147) - (9) Derivatives hedging securitised debt(3) ...... 47 55 44 Net debt (excluding lease liabilities) ...... (1,688) (1,564) (1,563)

Notes: (1) Cash and cash equivalents, in the cash flow statement, are presented net of an overdraft within a cash pooling arrangement, to which the Group has a legal right of offset. (2) The term loan is a drawing under a facility that is backed by the Coronavirus Large Business Interruption Loan Scheme. (3) Represents the element of the fair value of currency swaps hedging the balance sheet value of the Group’s US$ denominated A3N loan notes. This amount is disclosed separately to remove the impact of exchange movements which are included in the securitised debt amount.

Adjusted operating profit

The Group defines adjusted operating profit as operating profit before separately disclosed items as set out in the Group income statement. Separately disclosed items are those which are separately identified by virtue of their size or incidence. The Group presents adjusted operating profit as it allows a better understanding of the trading of the Group.

39 52 weeks ended 29 September 2018 28 September 2019 26 September 2020 (£ millions) Operating profit ...... 255 297 8 Add: separately disclosed items ...... Past service cost in relation to the defined benefit obligation ...... - 19 - Costs directly associated with Covid-19 and the enforced closure of pubs ...... - - 11 Gaming machine settlement ...... - - (13) Net profit arising on property disposals . . . . . (1) (1) - Impairment arising from the revaluation of freehold and long leasehold properties ...... 28 4 43 Impairment of freehold and long leasehold tenant’s fixtures and fittings ...... - - 10 Impairment of short leasehold and unlicensed properties ...... 15 5 7 Impairment of right-of-use assets ...... - - 33 Reversal of past impairment on transfer to assets held for sale ...... - (7) - Legal costs associated with the defined benefit pension scheme ...... 6 - - Adjusted operating profit ...... 303 317 99

Like-for-like Sales

The Group defines like-for-like sales as sales for a financial year compared to the sales in the previous year of all UK managed sites that were trading in both of the two periods. The Company presents like-for-like sales as this provides better insight into the trading performance than total revenue which is impacted by acquisitions and disposals.

52 weeks ended 29 September 2018 28 September 2019 26 September 2020(1) (£ millions) Reported Revenue ...... 2,152 2,237 1,475 Less: non like-for-like sales and income ...... (168) (887) (172) Like-for-like Sales ...... 1,984 1,350 1,303

Notes: (1) As like-for-like sales can only be measured when sites are trading the measure excludes periods of closure in response to the COVID- 19 pandemic.

Rounding

Certain numerical figures included in this document have been rounded. Therefore, discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding. Percentages in tables have been rounded and accordingly may not add up to 100 per cent.

No Profit Forecast

No statement in this document is intended as a profit forecast and no statement in this document should be interpreted to mean that earnings or earnings per share for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share.

Notice to investors in the United States of America

Neither this document nor the Application Form constitutes, or will constitute, or forms part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for New Shares to any Shareholder with a registered address in, or who is resident of, the United States. If you are in the United States, you may not purchase or subscribe for New Shares offered hereby. The Open Offer Entitlements, Excess Open Offer Entitlements and New Shares being offered outside the United States are being offered in reliance on Regulation S.

40 Any envelope containing an Application Form and post-marked from the United States and any Application Form in which the exercising holder requests New Shares to be issued in registered form and gives an address in the United States will not be valid.

Any amounts paid in respect of Application Forms that do not meet the foregoing criteria will be returned without interest.

Any person in the United States who obtains a copy of this document and/or an Application Form is required to disregard this document and/or the Application Form.

Overseas territories

Shareholders who have registered addresses in or who are resident in, or who are citizens of, all countries other than the United Kingdom should refer to paragraph 8 of Part III – Terms and Conditions of the Open Offer.

Notice to All Shareholders

Any reproduction or distribution of this document and/or an Application Form, in whole or in part, and any disclosure of its contents or use of any information contained in this document and/or an Application Form for any purpose other than considering an investment in the New Shares is prohibited. By accepting delivery of this document and, where applicable, an Application Form, each offeree of the New Shares agrees to the foregoing.

The distribution of this document and any accompanying documents into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. For further information on the Excluded Territories, please see Part III – Terms and Conditions of the Open Offer.

No action has been taken by the Company, the Underwriters and/or the Financial Adviser that would permit an offer of the New Shares or possession or distribution of this document, the Application Form or any other offering or publicity material in any of the Excluded Territories or in any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law.

Enforcement of Civil Liabilities

The ability of an Overseas Shareholder to bring an action against the Company may be limited under law. The Company is a public limited company incorporated in England and Wales. The rights of holders of Shares are governed by English law and by the Company’s Articles. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations.

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers. The majority of the Directors and executive officers are residents of the United Kingdom. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within that Shareholder’s country of residence or to enforce against the Directors and executive officers judgments of courts of that Shareholder’s country of residence based on civil liabilities under that country’s securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the United Kingdom against the Directors or executive officers who are residents of the United Kingdom or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on the foreign securities laws brought against the Company or the Directors in a court of competent jurisdiction in England or other countries.

41 OPEN OFFER STATISTICS

Price per New Share under the Open Offer ...... 210 pence

Discount of Offer Price to the Closing Price on 12 February 2021(1) 36%

Basis of Open Offer ...... 7 New Shares for every 18 Existing Shares

Number of Shares in issue at 19 February 2021(1) ...... 429,268,130

Number of New Shares to be issued by the Company under the Open Offer . . . up to 166,937,606

Number of Shares in issue immediately following completion of the Open Offer(2) (3) ...... up to 596,205,736

New Shares as a percentage of the Enlarged Share Capital immediately following completion of the Open Offer(2) (3) ...... 28.0%

Estimated net proceeds receivable by the Company from the Open Offer after expenses (3) ...... £339,568,973

Notes: (1) Being the last Business Day prior to the Announcement. (2) Assuming no options granted under the Share Schemes are exercised between 19 February 2021, being the latest practicable date prior to the publication of this document, and Admission becoming effective. (3) Assuming all 166,937,606 New Shares are issued under the Open Offer.

42 EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates in the table below is indicative only and may be subject to change. Please read the notes to the timetable set out below.

Record Date for entitlements under the Open Offer ...... 6.00 p.m. on 17 February 2021 Announcement of the Open Offer and publication of this document (1)(2)(3) ...... 22 February 2021 Ex-entitlement date for the Open Offer ...... 8.00 a.m. on 22 February 2021 Posting of this document, which contains the notice of General Meeting, the Form of Proxy, and the Application Forms (to Qualifying non-CREST Shareholders only) ...... 23 February 2021 Publication of notice of the Open Offer in the London Gazette . 23 February 2021 Open Offer Entitlements and Excess Open Offer Entitlements enabled in CREST and credited to stock accounts of Qualifying As soon as practicable after 8.00 a.m. on CREST Shareholders in CREST ...... 24 February 2021 Recommended latest time for requesting withdrawal of Open Offer Entitlements from CREST(4) ...... 4:30 p.m. on 4 March 2021 Latest time and date for depositing Open Offer Entitlements into CREST(5) ...... 3.00 p.m. on 5 March 2021 Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only) ...... 3.00 p.m. on 8 March 2021 Latest time and date for electronic proxy appointments, receipt of Form of Proxy or submission of CREST Proxy Instructions . . . . 10.00 a.m. on 9 March 2021 Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate) ...... 11.00 a.m. on 10 March 2021 Announcement of the results of the Open Offer through a Regulatory Information Service ...... 7.00 a.m. on 11 March 2021 General Meeting ...... 10.00 a.m. on 11 March 2021 Results of General Meeting announced through a Regulatory Information Service ...... 11 March 2021 Admission of, and dealings in New Shares commence on the London Stock Exchange ...... 8.00 a.m. on 12 March 2021 CREST members’ accounts credited in respect of New Shares in As soon as practicable after 8.00 a.m. on uncertificated form ...... 12 March 2021 Expected despatch of definitive share certificates for New Shares in certificated form ...... Within 14 days of Admission

Notes: (1) Subject to certain restrictions relating to Overseas Shareholders. See paragraph 8 of Part III – Terms and Conditions of the Open Offer (2) The times and dates set out in the expected timetable of principal events above and mentioned throughout this document, by announcement through a Regulatory Information Services, and in the Application Form may be adjusted by the Company, in which event details of the new dates will be notified to the Financial Conduct Authority and to the London Stock Exchange and, where appropriate, to Shareholders. (3) References to times in this document are to London times. (4) If your Open Offer Entitlements and Excess Open Offer Entitlements are in CREST and you wish to convert them to certificated form. (5) If your Open Offer Entitlements and Excess Open Offer Entitlements are represented by an Application Form and you wish to convert them to uncertificated form.

43 DIRECTORS, COMPANY SECRETARY AND ADVISERS Board of Directors

The members of the Company’s Board as at the date of this document are as set out in the table below.

Name Position Bob Ivell ...... Non-Executive Chairman Phil Urban ...... Chief Executive Officer Tim Jones ...... Chief Financial Officer Ron Robson ...... Deputy Chairman and Non-Executive Director Susan Murray ...... Senior Independent Director Keith Browne ...... Non-Executive Director Dave Coplin ...... Independent Non-Executive Director Eddie Irwin ...... Non-Executive Director Josh Levy ...... Non-Executive Director Jane Moriarty ...... Independent Non-Executive Director Colin Rutherford ...... Independent Non-Executive Director Imelda Walsh ...... Independent Non-Executive Director

Each of the Directors’ business address is the Company’s registered office address at 27 Fleet Street, Birmingham, B3 1JP.

Telephone: +44 (0)121 498 4000 Company Secretary Greg McMahon Registered Office 27 Fleet Street Birmingham B3 1JP Global Co-ordinator, Joint Bookrunner and Morgan Stanley & Co. International plc Sponsor 25 Cabot Square London E14 4QA Joint Bookrunners HSBC Bank plc 8 Canada Square London E14 5HQ

Banco Santander, S.A. Paseo de Pereda, 9-12 Santander, Cantabria Spain Financial Adviser N.M. Rothschild & Sons Limited New Court St Swithin’s Lane London EC4N 8AL Legal advisers to the Company as to English law Freshfields Bruckhaus Deringer LLP 100 Bishopsgate London EC2P 2SR Legal advisers to the Sponsor and the Latham & Watkins (London) LLP Underwriters as to English law 99 Bishopsgate London EC2M 3XF Auditor and Reporting Accountant Deloitte LLP 1 New Street Square London EC4A 3HQ Registrar and Receiving Agent Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA

44 PART I – LETTER FROM THE CHAIRMAN OF MITCHELLS & BUTLERS PLC

Directors: Registered Office: Bob Ivell 27 Fleet Street Phil Urban Birmingham Tim Jones B3 1JP Ron Robson Susan Murray Keith Browne Dave Coplin Eddie Irwin Josh Levy Jane Moriarty Colin Rutherford Imelda Walsh 22 February 2021

To holders of Mitchells & Butlers plc ordinary shares

Dear Shareholder

Proposed 7 for 18 Open Offer of up to 166,937,606 New Shares at 210 pence per New Share

Notice of General Meeting

1. Introduction

On 15 February 2021, the Company announced its intention to raise gross proceeds of up to £351 million by way of an open offer to be made to Shareholders in proportion to their existing holdings.

FY20 saw Mitchells & Butlers face the most challenging year in its history from an operational perspective. The impact of the COVID-19 pandemic has resulted in multiple periods of total closure of the restaurant, pub and bar estates in the United Kingdom and Germany and varying degrees of restrictions during the periods since March 2020 where only limited trading has been possible. The Group’s liquidity position has deteriorated significantly as a result of these closures and restrictions and the Open Offer is critical for the continued operation of the Group and its immediate financial stability.

The Company is undertaking a fully underwritten open offer to raise gross proceeds of up to £351 million by the issue of up to 166,937,606 New Shares (representing approximately 39 per cent. of the existing issued share capital and 28.0 per cent. of the Enlarged Share Capital) through an Open Offer on the basis of 7 New Shares at 210 pence per New Share for every 18 Existing Shares. The Open Offer will include an Excess Application Facility and the Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility.

The Company’s Existing Facilities (consisting of bilateral revolving facility agreements entered on 20 September 2017 with Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc), which were fully drawn with £150 million outstanding as at 19 February 2021, and the bilateral term facility agreements entered into with HSBC UK Bank plc and Santander UK plc on 11 June 2020 (structured under the UK Government-backed CLBILS), with £100 million outstanding as at 19 February 2021, are due to mature on 31 December 2021. On 14 February 2021, the Company entered into a New Debt Package which is intended to refinance the Existing Facilities (such that the CLBILS agreement with Santander UK plc may remain outstanding). As described below, the New Debt Package is conditional upon completion of the Open Offer.

In addition, in 2003, a subsidiary of the Company, Mitchells & Butlers Retail Limited (the Borrower) established a secured corporate debt financing structure (the WBS), which had £1,578 million principal outstanding as at 19 February 2021. Having already sought and obtained certain amendments and waivers in respect of the WBS financing earlier in the COVID-19 pandemic, the Company and the Borrower negotiated with Ambac Assurance UK Limited, as controlling creditor, (Ambac) and HSBC Trustee (C.I) Limited, as WBS trustee, (the Trustee) certain new or extensions of existing amendments and waivers in respect of the WBS financing (the 2021 WBS Amendments and Waivers) in light of the continuing COVID-19 pandemic and

45 its effect on the business. As described below, failure to complete the Open Offer will give Ambac and the Trustee the right to withdraw their consent to certain of the 2021 WBS Amendments and Waivers already in effect and will result in certain of the 2021 WBS Amendments and Waivers not coming into effect at all.

On the same date as the announcement of the Open Offer, the Company also announced that three of its major shareholders, being Piedmont Inc., Elpida Group Limited and Smoothfield Holding Ltd., had aggregated their shareholdings in the Company by being acquired by Odyzean Limited, forming the Odyzean Group. The Odyzean Group has entered into an irrevocable undertaking with the Company to take up its entitlements under the Open Offer and to subscribe for any additional shares that become available through, and are allocated to it under, the Excess Application Facility. The Odyzean Group’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. The Board formed a committee of independent directors who are not connected to the Odyzean Group (the Committee) to consider the Odyzean Group’s proposal and, following full consideration of all options and discussions with the Odyzean Group, the Committee agreed on the structure of the equity raise being an open offer, this being in the best interests of the Company and its shareholders as a whole, whilst ensuring the Odyzean Group’s support and certainty of funds on an accelerated timetable in order to meet the liquidity needs of the Company.

The Odyzean Group has communicated to the Company that it is fully supportive of the Group’s management team, which has re-established the business as a sector leader with a strong focus and direction. The Odyzean Group has indicated that, in order to streamline decision-making, it intends to review the composition of the Board, which may result in fewer independent Non-Executive Directors and less focus on compliance with the UK Corporate Governance Code recommendations in the future. In particular, the Odyzean Group has indicated that it will disregard specific corporate governance expectations around tenure and that it expects the Board to focus on retaining and acquiring skillsets amongst the independent Non-Executive Directors that are required to optimise the development of the business going forward. The Odyzean Group has also said that it intends to work with the 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. The Odyzean Group believes the long-term success of the Company would be beneficial to all stakeholders, including its approximately 40,000 employees and its suppliers, lenders and shareholders. Further detail regarding these changes is provided in paragraph 2 of this Part I.

The purpose of this document is to explain the background to and reasons for the Open Offer, set out the terms and conditions of the Open Offer and provide you with a Notice of General Meeting to be held to consider and, if thought fit, to pass the Resolutions required to authorise the Company to carry out the Open Offer.

This document also explains why the Directors consider the Resolutions to be proposed at the General Meeting to be in the best interests of Shareholders and why the Directors unanimously recommend that Shareholders vote in favour of the Resolutions.

2. Background to and reasons for the Open Offer

Background to the Open Offer

2020 saw Mitchells & Butlers face the most challenging year in its history from an operational perspective. The impact of the COVID-19 pandemic has resulted in multiple periods of total closure of the restaurant, pub and bar estates in the United Kingdom and Germany and varying degrees of restrictions during the periods since March 2020 where only limited trading has been possible.

The Group’s liquidity position has deteriorated significantly as a result of these closures and restrictions and the Open Offer is critical for the continued operation of the Group and its immediate financial stability. To provide the Group with a strong and stable financial base, the Group has agreed the 2021 WBS Amendments and Waivers with Ambac and the Trustee with respect to the WBS financing, and the New Debt Package with its Lenders, both of which are contingent on the successful completion of the Open Offer. The absence of these new arrangements will result in events of default under the Existing Facilities and the Issuer/Borrower Facility Agreement (which will occur on 10 April 2021 with respect to the Existing Facilities and, with respect the Issuer/Borrower Facility, would be expected to occur on 30 April 2021 (being the date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers in the event that the Open Offer has not been completed by then)). See “–Importance of your vote” below.

46 The successful completion of the Open Offer will allow the Group to avoid these events of default. The Open Offer will also allow the Group to take advantage of the previous operational progress gained in the context of a potentially weakened hospitality sector in order to win market share and to continue with its long-term strategy of creating value for shareholders by reducing the Group’s level of debt as a proportion of the total value of the Group’s business.

Strengths and Strategy

The Group is one of the largest operators of restaurants, pubs and bars in the United Kingdom, providing a wide range of eating and drinking-out experiences through well-known brands. The Group has a well- positioned estate of 82 per cent. freehold and long leasehold properties and a portfolio of 15 brands or formats diversified across a range of customer demographics and geographical locations in the United Kingdom and in Germany. The estate has a geographical spread across Great Britain, which is closely correlated to the density of the population, and in addition operates 44 ALEX city centre bars and brasseries, one ALEX franchise, one Miller & Carter restaurant in Germany and one site in Northern Ireland. At the end of FY19, prior to the start of COVID-19, the Group employed over 40,000 people and served nearly 120 million meals and 380 million drinks during FY19. The Group maintains strong food safety scores, with over 98% of sites achieving a National Food Hygiene Rating of four or above and 85.7 per cent. holding the highest score of five out of five.

The brand portfolio is diversified across a spectrum of food or drink led occasions, and from value to premium in terms of pricing, enabling participation across the majority of eating and drinking-out occasions. For example, Harvester is focused on the great value, food-led, family experiences whereas Miller & Carter is targeted towards the more premium, food-led visit. All Bar One provides a premium environment for drink-led occasions and the High Street collection of sites is more driven by value. This diversification, along with the strength of the estate, enables participation in different markets, often in the same geographical location, allowing customers to visit different Mitchells & Butlers sites in the same area to suit the varying purpose of their visits. It provides some diversification in Group performance to partially mitigate sensitivity to macro events which impact one area of the market, for example weather, by ensuring that lost revenue in one part of the estate is at least partially balanced by stronger or sustained performance in other parts.

Over the past four financial years, the Group has maintained a strategic approach focused on three priority areas which have been instrumental in repositioning the business within the marketplace, resulting in strong performance in recent years. The three pillars of the strategy are:

- Build a more balanced business – the objective in this part of the strategy is to optimise the balance of brands across the estate in order to create long-term value, focusing on improving the quality of the estate through premiumisation and amenity upgrades. Following a 27 per cent. increase in supply in the market from 2014 to 2019, which led to enhanced amenity in new sites, the need to upgrade the guest environment was identified in order to improve the Group’s competitive position. Enhanced amenity also facilitated premiumisation and, therefore, increased spend per head, which was central to the capital investment programme and brand development. An example of this was the Miller & Carter programme through which the brand has grown to 117 sites in the United Kingdom delivering EBITDA returns on total expansionary capital since the start of the programme of 49 per cent. An investment cycle of six to seven years has been targeted under this pillar. Since the beginning of the programme in FY16, the Group has completed 946 projects to the end of FY19, and for projects completed in FY19 returns on investment of conversion and acquisition projects were 27 per cent. and remodel returns were 34 per cent.

- Instil a more commercial culture – this part of the strategy is focused on driving business efficiency and improvements through initiatives focused on specific operational areas, giving managers the tools needed to deliver benefits. In sites, managers have been equipped with the knowledge to confidently grow sales in their local markets and have been provided with systems which assist them in running their businesses more efficiently. Centrally, the procurement team continue to leverage the buying power of the Group and have successfully mitigated a large proportion of inflation costs across food, drink and logistics. An example of an initiative in this area is the enhanced labour deployment systems, which have been used in combination with a specialist team of system experts to deliver improved efficiencies. The system generates accurate deployment schedules, individual to the trading patterns of a specific business, enabling the site manager to deploy staff in the most efficient way. An internal team of experts help managers to get the most out of the system and to optimise labour deployment in their business.

47 - Drive an innovation agenda – the strategic aim of this pillar is to seek to empower positive change within the business to ensure that brands, concepts, and digital tools remain relevant and competitive. Innovation takes place at all levels of the business from single product and process development to the organisation-wide digital strategy. The Company’s digital strategy represents an opportunity to unlock value by facilitating agile integration with new technology, making the Group more able to provide flexible solutions to accommodate changing needs as customer behaviour evolves. Examples include an order at table facility via customers’ mobile phones, particularly useful during the COVID- 19 pandemic, and the development of brand apps and loyalty programmes that facilitate more targeted and more rewarding communication with customers. The Company also seeks to utilise its scale and position to lead on environmental issues which impact its sector by finding innovative solutions to pressing issues.

The Directors believe that the Group’s clear and consistent strategy has seen it deliver sustained like-for-like sales outperformance of the market over recent years. Progress on each of these pillars has been delivered through the Ignite programme, a series of internal business improvement initiatives, which was first launched during FY16. Ignite delivers improvements across a wide range of operational areas the results of which have been improved like-for-like sales growth and increased profit growth despite the cost headwinds faced by the sector, whilst supporting long-term deleverage.

As a hospitality business, people are central to the Group’s success and critical to delivering the all-important experiences to customers. The Group relies on its people to uphold the highest standards whilst making each visit enjoyable, personal and memorable which is why attracting, training and retaining great people is a key focus for the organisation. Part of the strategy in this area is to provide market leading training and progression opportunities, which are facilitated through a centralised Human Resources function. The Group has a well- established apprentice programme with seven courses up to bachelor’s degree level. During FY19, 685 people completed an apprenticeship scheme and 1,600 existing employees had enrolled on a course. The apprentice scheme is expected to provide a reliable future talent stream to the organisation.

The Group is committed to operating safely and responsibly which is integral to maintaining the reputation of the business and ensuring all customers have an enjoyable occasion. Operational policies and procedures are developed centrally, with expert input, for consistency across the Group and each brand is responsible for auditing standards within sites. Every pub, restaurant and bar is also subject to external safety audits, and in FY20 all of the sites passed the standard required by the National Food Hygiene Rating Scheme requirement with 85.7 per cent. achieving the highest score of five out of five.

Operating the business in a sustainable way underpins the Group’s three strategic priorities. The Group has purposefully interlinked sustainability into the strategic priorities so that it increasingly becomes part of the culture. In FY19, the Group established a new sustainability strategy with renewed focus on the current challenges facing the planet and developed priorities in line with the UN Sustainable Development Goals. As a result, the Group introduced four targets to monitor progress across key areas;

- To reduce carbon emissions by 25 per cent. by 2030;

- To reduce food waste by 20 per cent. by 2025;

- To eliminate unnecessary single use plastics as identified by WRAP by 2021 (achieved); and

- To increase recycling to 80 per cent. by 2025.

The Company aims to enhance the positive impact it has on society. As an organisation focused on bringing people together this ambition is central to the sustainability strategy and one where there is considerable potential. The Company aims to provide welcoming and safe environments where local communities and friends can gather together and share experiences. In addition to this, work has begun on a number of areas which can have a further positive impact on the communities surrounding the businesses. Examples include providing social mobility through the well-established training programme and associated progression opportunities, and by working with charities such as FareShare to donate to communities and causes.

An example of a Group initiative to reduce waste and, therefore, reduce carbon emissions, is the refurbishment of kitchen equipment as part of the capital investment programme. A review of the process identified more opportunities to reuse equipment such that wherever possible refurbished existing kitchen equipment and furnishings are now used in new investment projects. This not only prevents the refurbished equipment from

48 going to landfill but also reduces reliance on production of new equipment. During FY18 and FY19, 557 pieces of equipment were saved from landfill which equates to 274m³.

Capital allocation strategy

In terms of capital allocation and balance sheet strategy the Group’s focus is to reduce gearing whilst focusing on enhancing and maintaining its competitive position. The Group has ongoing fixed cash obligations, notably in respect of debt service and pension fund contributions, after which investment in the estate and distribution to shareholders can be considered. Subsequent capital allocation decisions are made primarily to protect the ongoing and future health of the business. Prioritisation of the capital programme underpins the maintenance of the competitive position of the estate which is essential to ensure future profit generation. The Group would not expect to see a structural, or permanent, increase in the use of short-term facilities when assessing dividends, and therefore dividend payments have not been made in recent years. This capital allocation framework will remain under review by the Board going forward.

Recent performance and pre-COVID leverage

The Ignite programme was launched in mid FY16 and began to impact sales from late in FY17, since when like-for-like sales growth has been consistently ahead of the market, as measured by the Coffer Peach Tracker. Like-for-like sales growth improved from decline of -0.8 per cent. in FY16 to growth of 1.8 per cent. in FY17, reflecting progress made through delivery of Ignite initiatives. In FY18 like-for-like sales growth was broadly maintained at 1.3 per cent., despite difficult weather conditions, with an increasing focus on customer feedback and complaints, amongst other initiatives, helping to drive sales growth.

FY19 was a strong year for the Group demonstrating the progress being made through the operational strategy. The work undertaken, principally through the implementation of its Ignite programme of initiatives, drove a strong trading performance and generated profit growth whilst the Group continued to invest in the estate and pay down debt. Like-for-like sales grew by 3.5 per cent., with strong performances across all brands contributing to continued, consistent outperformance of the market. Within this, the uninvested estate grew by 1.5 per cent., demonstrating the breadth of performance across the portfolio, and total sales grew by 3.9 per cent. over the year. Adjusted operating profit of £317 million grew by £14 million against the previous year. Ignite initiatives focusing on sales and efficiency enhancements resulted in adjusted operating margin growth of 0.1ppts, despite the inflationary cost headwinds which continued to impact the sector. On a statutory basis, profit before tax of £177 million grew by 36.2 per cent. against the previous year.

Meanwhile, the Group continued to deleverage the business through cash flow generated by operations. Net debt reduced by £124 million from FY18 to FY19 to stand at £1.56 billion and this was maintained in FY20, despite the COVID-19 pandemic, to close the financial period at £1.56 billion before the impact of IFRS 16. At the end of FY19, before the impact of COVID-19 on profitability, net debt to adjusted EBITDA was 3.6x, having fallen from 4.0x at the end of FY18, a reduction of 41 bps.

Impact and response to the COVID-19 pandemic

When the first full lockdown in the United Kingdom was announced on 20 March 2020, the business was closed immediately, with priority being to protect team members and customers and to ensure the safe closure of each site. A number of measures were taken from the outset of the crisis and have been employed consistently during future lockdowns:

- putting over 99 per cent. of employees on furlough during complete closure of the estate;

- reducing operating costs to the extent possible to keep the estate secure, safe and in good condition;

- halting all discretionary capital expenditure, including the development programme, as part of the broader cash management plan; and

- selling stock with a short shelf life at or below cost and, where that proved impossible, working with charitable institutions to avoid as much waste as possible.

Securing a strong and stable financial base for the business became an immediate priority. The 2020 WBS Amendments and Waivers were agreed with the consent of Ambac and the Trustee and announced on 12 June 2020. In order to secure such amendments and waivers, the Group gave certain undertakings in relation to its

49 own financing arrangements, namely, to secure the £250 million Existing Facilities referred to below, and an undertaking to provide funding into the WBS Group of up to £100 million in line with drawings on the Liquidity Facility. In light of the continuing COVID-19 pandemic and its effect on the Group’s business, the 2021 WBS Amendments and Waivers were agreed on 14 February 2021. However, as described below, failure to complete the Open Offer will give Ambac and the Trustee the right to withdraw their consent to certain of the 2021 WBS Amendments and Waivers already in effect and will result in certain of the 2021 WBS Amendments and Waivers not coming into effect at all.

In addition, the following was agreed with the Group’s unsecured relationship banks:

- an extension of the term of existing £150 million committed unsecured facilities to 31 December 2021; and

- the provision of an additional £100 million of liquidity through two new facilities, also to 31 December 2021, backed by the CLBILS.

During the initial closure period new COVID-secure procedures were developed which enabled the Group to reopen with safe environments whilst still providing a hospitable feel and great experiences for customers. The people within the organisation responded to the challenges faced with resilience and professionalism, which was key to successful trading when the majority of the estate reopened on 4 July 2020. New procedures were swiftly adopted and the Group was able to take advantage of the boost to consumer confidence that the UK Government sponsored ‘Eat Out to Help Out’ scheme generated in August, which alongside reduced VAT for food and non-alcoholic drink sales, resulted in like-for-like sales growth of 1.4 per cent. from 2 August 2020 to 29 August 2020, during which period 94 per cent. of the Group’s UK estate was open. By 26 September 2020, over 96 per cent. of the estate had reopened and, although trading remained resilient in comparison to the market, like-for-like sales returned to decline.

Subsequently, COVID-19 case numbers began to increase again resulting in the introduction of further restrictions by the UK Government and the devolved nations. The increased measures began with a 10pm curfew, full table service and mandatory mask wearing in England, causing a decline in consumer confidence and a reduction in the frequency of customer visits. A tier system was introduced in England from 14 October where sites in tier 3 could trade if alcohol was served with a substantial meal and no mixing of different households was allowed, tier 2 sites were subject to a ban on different households mixing indoors and a 10.00 p.m. curfew, and tier 1 sites were subject to a 10.00 p.m. curfew, the “rule of six” indoors and outdoors, and full table service. London began in tier 1 but was moved into tier 2 after three days. Restrictions steadily built to a second lockdown in England which began on 5 November 2020 resulting again in full closure of the estate. Under these tier restrictions, from 14 October 2020 to 4 November 2020 sales for sites when open in FY21, declined in tier 1 sites by 10.7 per cent. and in tier 2 and 3 sites by 35.8 per cent., with the household mixing ban being a significant factor.

Following the second lockdown a new tier system was introduced from 2 December 2020. The majority of the estate fell under tier 2 and tier 3 restrictions. Tier 2 sites were subject to no household mixing indoors and a substantial meal was required to serve alcohol and tier 3 sites were closed. Under these restrictions, sales for sites when open in FY21, declined in tier 2 sites from 2 December 2020 to 15 December 2020 by 43.1 per cent. Over the ensuing weeks an increasing proportion of the estate moved into higher tiers culminating in the announcement of a third lockdown from 6 January 2021, in particular in response to a new variant of COVID- 19 which had caused a rapid increase in cases.

Looking forward, the Group is encouraged by progress that is being made on approval and roll out of vaccines, but the extent of the current lockdown, and what will succeed it in terms of restrictions, are currently unknown.

Throughout the pandemic, the Group has worked hard to keep team members connected and informed. A new support portal was launched which included regularly updated ‘frequently asked questions’ and central communication from management. Social media platforms have also been used to create inclusive groups across all teams, from sites and the Retail Support Centre in Birmingham, to share positive and engaging content and ideas. Through the established online learning platform, continued learning and development opportunities were made available during closure periods. This platform was also used to quickly communicate new operational procedures to ensure that teams were always updated with, and trained on, the latest safety requirements. The welfare and mental health of team members has been a primary concern and it has been encouraging to see the way the business has pulled together at this difficult time.

50 Digital technology has become increasingly important in supporting hospitality businesses during the pandemic. Technology allows the service cycle to be adapted to better adhere to Government restrictions. The Group had already developed a facility for customers to order at the table on their phone and this has been quickly rolled out across more brands in response to the pandemic. These sorts of technological interventions also help to enhance the efficiency of the service cycle and provide long-term customer and operational improvements.

Mitchells & Butlers has played a full role in forums led by UKHospitality (a trade association which represents the interests of the UK’s hospitality sector) that have helped to devise the Hospitality Sector Protocols Document that the UK Government issued for the sector, and continues to lobby the UK Government directly to ensure that the Group, and the sector, receives the support needed to protect jobs until restaurants, pubs and bars can be reopened. UK Government support to date has been important to the Group, including the business rates holiday worth approximately £100 million per annum to the Group. VAT rates have also been reduced on certain supplies which has had a sector specific benefit to food-led businesses. The Group’s employees have also benefitted from the Coronavirus Job Retention Scheme, with £165 million claimed as at 26 September 2020, which has enabled the protection of many roles. Despite this support approximately, 1,300 redundancies had to be made prior to and during November 2020. The reduced levels of activity and closure of a small number of sites meant that these roles could no longer be supported.

Future arrangements with the Odyzean Group

As a result of the establishment of Odyzean Limited, 55 per cent. of the Company’s Shares are owned and controlled by the Odyzean Group. The Odyzean Group has communicated to the Company that it is fully supportive of the Group’s management team, which has re-established the business as a sector leader with a strong focus and direction. The Odyzean Group has indicated that, in order to streamline decision-making, it intends to review the composition of the Board, which may result in fewer independent Non-Executive Directors and less focus on compliance with the UK Corporate Governance Code recommendations in the future. In particular, the Odyzean Group has indicated that it will disregard specific corporate governance expectations around tenure and that it expects the Board to focus on retaining and acquiring skillsets amongst the independent Non-Executive Directors that are required to optimise the development of the business going forward. The Odyzean Group has also indicated that the time and cost devoted by the senior management team to public company matters should be reduced.

The Odyzean Group has said that it intends to work with the management team to ensure the strategy and structure of the business are appropriate to optimise its long-term success. The Odyzean Group believes the long-term success of the Company would be beneficial to all stakeholders, including its approximately 40,000 employees and its suppliers, lenders and shareholders. The Odyzean Group believes that this review could include consideration of the speed and nature of the existing Ignite investment programme and opportunities for acquisitions and partnerships. In order to support these initiatives, the Company may in the medium term (at least 12 months after the date of this document) need to raise additional capital through the issue of new shares.

Prior to the formation of the Odyzean Group, the shareholder representatives of Piedmont Inc. and Elpida Group Limited confirmed their support for the Group’s proposed remuneration policy as set out in paragraph 7 of Part X – Additional Information. The Odyzean Group subsequently confirmed that it will continue to support the proposed remuneration policy but has indicated that it intends to work with the Board to ensure the remuneration structure for all levels of the management team remains fully aligned with both the strategy of the business and shareholder value maximisation over the long-term. Any changes to the current remuneration structure, if proposed, may run counter to listed company norms and benchmarking. The Odyzean Group has, however, confirmed that there are no immediate plans to propose or implement arrangements which are not consistent with the proposed remuneration policy.

In addition, the Odyzean Group has indicated that it will support a focus on reinvesting any surplus cash in the Group’s businesses and therefore would prefer the Company to prioritise debt repayment and investment in the Group’s businesses over the payment of dividends for the foreseeable future.

51 (b) ensure it and its associates do not take any action which would prevent the company from complying with its obligations under the Listing Rules; and (c) not propose, and ensure its associates do not propose, any shareholder resolution which is intended to circumvent the proper application of the Listing Rules. If the Odyzean Group does not enter into a relationship agreement with the Company during such six month period, the Company will be required to disclose this in its annual report and any transactions entered into between the Company and members of the Odyzean Group will not be subject to certain exemptions from the related party rules set out in the Listing Rules. The Company would expect such enhanced oversight measures to apply until a relationship agreement was entered into. The Company may need to consider a transfer of its listing category from a premium listing to a standard listing if a relationship agreement that satisfies the Listing Rules is not entered into with Odyzean Limited, and potentially its owners, within six months of them having become controlling shareholders. If the Company moved to a standard listing this may have adverse consequences for the Company and its shareholders, such as exclusion from certain of the FTSE indices for listed shares.

Further, as a result of the Odyzean Group holding over 50 per cent. of the Company’s issued share capital, it may acquire further interests in the Company without being required to make a mandatory offer for the remaining Shares pursuant to Rule 9 of the Takeover Code.

If there is any change of control of Odyzean after the initial formation of Odyzean which results in a change of control of the Company, there would be a termination right for the lenders under the New RCF Agreement.

Reasons for the Open Offer

The Directors unanimously agree that the Open Offer is critical for the continued operation and financial stability of the Group, including the WBS Group, and for managing the business through the current pandemic and, ultimately, to deliver long-term, sustainable growth to Shareholders.

The effect of the COVID-19 pandemic on trading has had a significant adverse impact on the financial position of the business. Prolonged periods of closure have caused a drain on cash resources, and the cumulative effect of three lockdowns in England over the past year is significant. Even where the Group’s sites have been allowed to open, social distancing restrictions have had a material impact on sales, with tier 2 and 3 sites experiencing sales declines for sites when open in FY21, of 35.8 per cent. from 14 October to the close of 4 November 2020, approaching the point at which profit generation becomes marginal. During December 2020, more than 90 per cent. of the estate was closed over the important festive season, one of the most profitable times of the year for the Group and other businesses in the hospitality sector, and currently the Group is facing a further prolonged period of closure with no certainty on an end date. Uncertainty remains over the restrictions which will be in place when restaurants, pubs and bars are permitted to reopen, and it is expected that trading levels for the remainder of this year will be lower than pre-COVID levels. When substantially closed, the Group’s cashflows are cash negative thereby depleting its cash resources. While the Group benefits from UK Government support measures (such as relief from business rates and the Coronavirus Job Retention Scheme), these may not be extended and are not sufficient to cover the Group’s current costs. The Group had a cash balance of £113 million as at 16 January 2021. Agreement has been reached with the trustee of the Group pension funds to delay monthly contributions from January to March 2021, inclusive, with these becoming due in April 2021. Taking this into account, from 1 January 2021 through to the date of this document, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group has securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation) as well as £13 million of deferred pensions payments in regard to January, February and March 2021. The Group may also look to acquire suitable restaurants, pubs and bars which come to market.

In addition, the consequence of the financial impact of COVID-19 has been an increase in unsecured debt. As at 28 September 2019 the Group had unsecured committed bank facilities totalling £150 million, of which nil was drawn. Prior to the first national lockdown in March 2020, the full £150 million was drawn on 16 March 2020. Subsequently an additional £100 million was raised through the UK Government backed CLBILS on 11 June 2020. Since 5 January 2021 the full amount of £250 million has been drawn. This increase in unsecured debt is not sustainable in the long-term, particularly given further uncertainty that lies ahead. Capital expenditure has also been suspended from March 2020 due to the pandemic, which is also not sustainable as investment is crucial to maintaining the competitiveness and condition of the estate. As described above, the Group also agreed the 2021 WBS Amendments and Waivers with Ambac and the Trustee with respect to the WBS financing, and the New Debt Package with its Lenders, both of which are contingent on the successful completion of the Open Offer.

52 The Directors carefully considered the best time to launch an Open Offer. At the beginning of the crisis, during initial closure, short-term agreements with Ambac and the Trustee, together with additional liquidity from the Group’s unsecured lenders were obtained so that the severity of the impact could be assessed. Three prolonged periods of closure of various lengths have now been endured, and the end to the current lockdown is uncertain putting pressure on the Group’s liquidity position. There is a need for additional liquidity in order to meet the Group’s immediate debt service obligations and to obtain the 2021 WBS Amendments and Waivers and the New Debt Package and thus avoid events of default under the Group’s Existing Facilities and the Issuer/Borrower Facility Agreement (which will occur on 10 April 2021 with respect to the Existing Facilities and, with respect the Issuer/Borrower Facility, would be expected to occur on 30 April 2021 (being the date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers in the event that the Open Offer has not been completed by then)).

A key consideration has also been the quantum of the proposed Open Offer. In addition to providing the ability to meet its fixed costs and to enable the resumption of investment in the estate, the Directors considered a number of different scenarios and assumptions and the impact these might have on the Group’s financial position. These included the length of the current lockdown, potential future lockdowns, the impact of ongoing social distancing measures, the strength of any possible recovery, and the likelihood of any further restrictions. Taking these into consideration, the Directors believe that an Open Offer to raise gross proceeds of £351 million would provide the Group with the optimum capital structure to support the business through the current pandemic, and, going forward, deliver its strategy.

The Directors have carefully considered the timing of the Open Offer and believe that the quantum of the Open Offer will be sufficient to meet the needs of the business and is a prudent and sensible approach to address the current liquidity constraints, to support the balance sheet and to position the Group to emerge from this pandemic in a stronger financial position.

3. Use of proceeds

The Open Offer is expected to raise up to £351 million in gross proceeds and up to approximately £340 million in net proceeds.

An Open Offer of up to £351 million provides the Company with the capital to reduce its unsecured debt and to support the WBS financing through an injection of equity, allowing the Group to meet its fixed obligations and also enabling the resumption of investment in the estate to maintain the competitive position. The Open Offer is intended to provide the Group with the financial stability and strength to emerge from the crisis, allowing previous momentum to be regained.

The Company intends to use the net proceeds of the Open Offer for:

• Repayment of £100 million in debt in connection with the refinancing of the Existing Facilities;

• Full repayment of £150 million under the RCF Agreements (offset in full by £150 million made available under the New RCF Agreement);

• Paying overdue rental payments of £28 million and deferred VAT of £30 million;

• Making an equity injection into the WBS Group in order to enable the WBS Group to repay an anticipated £60 million of debt to be incurred under the WBS’ Liquidity Facility as at March 2021, with full repayment of the drawn amount to be settled no later than December 2021;

• Making deferred pension payments of £13 million in respect of each of January, February and March 2021; and

4. Financial impact of the Open Offer

Had the Open Offer taken place as at the date of the latest audited balance sheet, being 26 September 2020, the effect would have been an increase in cash and cash equivalents of £279 million.

53 Your attention is also drawn to Part VIII – Unaudited Pro Forma Financial Information, which contains an unaudited pro forma statement of net assets that illustrates the effect of the Open Offer on the Group’s net assets as at 26 September 2020 as if the Open Offer had been undertaken at that date.

5. Terms of the Open Offer

The Directors have given careful consideration as to how to structure the proposed issue of the New Shares. Following consultation with several of the Company’s major Shareholders, the Directors have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders.

Pursuant to the Open Offer, the Company is proposing to offer up to 166,937,606 New Shares by way of an open offer to Qualifying Shareholders being Shareholders other than those with a registered address, or resident in, one of the Excluded Territories (subject to certain exceptions). The offer is to be made at 210 pence per New Share, payable in full on acceptance by no later than 11.00 a.m. on 10 March 2021. The Open Offer is expected to raise up to approximately £340 million, net of expenses. The Offer Price represents a 36 per cent. discount to the closing market price of 328.5 pence per Share on 12 February 2021 (being the last Business Day prior to the Announcement).

The Open Offer will be made on the basis of:

7 New Shares at 210 pence per New Share

for every 18 Existing Shares held by Qualifying Shareholders at the close of business on the Record Date. Entitlements to New Shares will be rounded down to the nearest whole number (or to zero) and fractional entitlements will not be allotted to Shareholders and will be discarded. Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer. Qualifying Non- CREST Shareholders will have received an Application Form with this document which sets out their basic entitlement to New Shares as shown by the number of Open Offer Entitlements offered to them. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements on 24 February 2021.

Qualifying Shareholders who take up their Open Offer Entitlements in full may apply to subscribe for Excess Shares using the Excess Application Facility. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to and are able to apply to subscribe for more than their Open Offer Entitlements will have Excess Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 5 of Part III – Terms and Conditions of the Open Offer of this document for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The principal terms of the Underwriting Agreement are summarised in paragraph 9.1 of Part X – Additional Information of this document.

54 The aggregate number of New Shares available for subscription pursuant to the Open Offer (including any New Shares that may be issued under the Excess Application Facility) will not exceed 166,937,606 New Shares (representing approximately 38.9 per cent. of the existing issued share capital and 28.0 per cent. of the Enlarged Share Capital).

If a Qualifying Shareholder does not (or is not permitted to) take up any New Shares under the Open Offer, such Qualifying Shareholder’s shareholding in the Company will be diluted by up to 28.0 per cent. as a result of the Open Offer (assuming no options granted under the Share Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and completion of the Open Offer).

The Open Offer is conditional, inter alia, upon:

(a) the passing of the Resolutions at the General Meeting without material amendment;

(b) the Underwriting Agreement having become or been declared unconditional in all respects save for the condition relating to Admission of the New Shares; and

(c) Admission of the New Shares becoming effective by not later than 8.00 a.m. on 12 March 2021 (or such later time and/or date as the Company and the Global Co-ordinator may agree, being not later than 31 March 2021).

If any such conditions are not satisfied or, if applicable, waived, the Open Offer will not proceed and any Open Offer Entitlements and Excess Open Offer Entitlements admitted to CREST will thereafter be disabled and application monies will be returned to applicants (at the applicant’s risk) without interest as soon as possible. The interest earned on such monies, if any, will be retained for the benefit of the Company.

The New Shares issued pursuant to the Open Offer will rank pari passu in all respects with the Existing Shares, including the right to receive dividends and other distributions made, paid or declared in respect of the ordinary share capital of the Company after the respective dates of issue of the New Shares.

Applications will be made to the FCA and to the London Stock Exchange for the New Shares to be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities. It is expected that Admission of the New Shares will become effective and that dealings in the New Shares will commence at 8.00 a.m. on 12 March 2021 (whereupon an announcement will be made by the Company to a Regulatory Information Service).

The results of the Open Offer are expected to be announced on or around 11 March 2021.

Shareholders should be aware that the Open Offer is not a rights issue. As such, Qualifying Non- CREST Shareholders should note that their Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST, and be enabled for settlement, the Open Offer Entitlements and Excess Open Offer Entitlements will not be tradeable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. New Shares for which application has not been made under the Open Offer will not be sold in the market for the benefit of those who do not apply under the Open Offer and Qualifying Shareholders who do not apply to take up their entitlements will have no rights nor receive any benefit under the Open Offer. New Shares not taken up by Shareholders under the Open Offer will be allocated to Qualifying Shareholders who apply under the Excess Application Facility (in accordance with the Excess Allocation Method) with the proceeds ultimately accruing for the benefit of the Company. The Odyzean Group has committed to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility. The Open Offer will be made to Shareholders by means of a notice in the London Gazette.

The attention of Shareholders and any persons (including, without limitation, custodians, nominees and trustees) who have a contractual or other legal obligation to forward this document or an Application Form into a jurisdiction other than the United Kingdom is drawn to paragraph 8 of Part III – Terms and Conditions of the Open Offer of this document, which forms part of the terms and conditions of the Open Offer. In particular, non-Qualifying Shareholders will not be sent this document or the Application Form.

55 Some questions and answers, together with details of further terms and conditions of the Open Offer, are set out in Part II – Some Questions and Answers about the Open Offer and Part III – Terms and Conditions of the Open Offer of this document and where relevant will also be set out in the Application Form.

Overseas Shareholders should refer to paragraph 8 of Part III – Terms and Conditions of the Open Offer of this document for further information on their ability to participate in the Open Offer.

6. Dilutive impact of the Open Offer

If a Shareholder does not (or is not permitted to) take up the offer of New Shares under the Open Offer, such Shareholder’s proportionate ownership and voting interests in the Company will be diluted by up to 28.0 per cent. as a result of the Open Offer. For the purposes of calculating: (a) the number of New Shares to be issued pursuant to the Open Offer; (b) the increase to the Existing Share Capital resulting from the Open Offer; and (c) the specified dilutive effect of the Open Offer, the issue of any Shares in respect of the vesting or exercise of any awards under the Share Schemes which may occur between the latest practicable date prior to the publication of this document and the Record Date has been disregarded.

7. Intentions of the Directors

The Directors, who hold in aggregate 473,706 Existing Shares, representing approximately 0.1 per cent. of the Company’s existing issued ordinary share capital as at 19 February 2021 (being the latest practicable date prior to the publication of this document), each have committed to: (i) take up in full his or her rights to subscribe for New Shares under the Open Offer in respect of the New Shares to which they are entitled; and (ii) vote their Existing Shares in favour of the Resolutions. Where their shares are held in trust or with nominees, such Directors intend to recommend that such New Shares be applied for in full.

8. Irrevocable undertakings

The Company has received an irrevocable undertaking from the members of the Odyzean Group (the Shareholder Undertaking) to:

(a) vote in favour of the Resolutions to be proposed at the General Meeting; and

(b) to subscribe for its pro rata entitlement under the Open Offer, and to subscribe for any Excess Shares made available and allocated to the Odyzean Group through the Excess Application Facility.

As at 19 February 2021 (being the latest practicable date prior to the publication of this document), the Odyzean Group held 236,199,685 Shares in aggregate (representing approximately 55.0 per cent. of the Existing Shares). If no Qualifying Shareholders, other than members of the Odyzean Group, apply to subscribe for their Open Offer Entitlements and, therefore members of the Odyzean Group are the only Shareholders that take up New Shares pursuant to the Open Offer, the Odyzean Group’s shareholding will increase up to a maximum to 67.6 per cent. of the Company’s Enlarged Share Capital.

The Shareholder Undertaking is subject to the conditions set out in paragraph 9.2 of Part X – Additional Information.

9. Current trading

Since the UK Government announcement on 30 December 2020, which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group’s sites have been open and the Group is not currently trading. All of the Group’s German businesses were closed on 1 November 2020. In addition, in the FY20 Financial Statements, the Group identified a post-balance sheet event of a reduction of £43 million in the book value of property, plant and equipment, which is summarised in Note 5.4 of the FY20 Financial Statements, which are incorporated by reference into this document.

56 burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also had securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non essential capital expenditure continues to be suspended. As at 16 January 2021, the Group operated 1,649 managed restaurants, pubs and bars.

10. Dividends and dividend policy

We draw your attention to the risk factor entitled “-The Company does not currently pay dividends on the Shares and has agreed under the 2021 WBS Amendments and Waivers, the Santander CLBILS and the New RCF Agreement not to pay dividends until certain conditions are met” in the section headed “Risk Factors”.

11. General Meeting and Resolutions

You will find set out at the end of this document a notice convening a general meeting of the Company to be held at 10.00 a.m. on 11 March 2021. This General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions. A summary and explanation of the Resolutions is set out below, but please note that this does not contain the full text of the Resolutions and you should read this section in conjunction with the Resolutions in the Notice of General Meeting at the end of this document.

The Directors take the well-being of the Group’s Shareholders, directors and colleagues very seriously. The UK Government’s restrictions on public gatherings and associated social distancing measures in respect of the COVID-19 crisis remain in place as at the latest practicable date prior to the publication of this document. The Directors therefore regret that it will not be possible for Shareholders to attend the General Meeting in person. Shareholders should not attend the General Meeting in person and anyone attempting to do so will be refused entry. There will be only limited Company representation at the meeting and the Company’s advisers have also been asked not to attend. In order to comply with relevant legal requirements, the General Meeting will be convened with the minimum necessary quorum. This will be facilitated by the Company.

The Company is providing a telephone facility to allow Shareholders to listen to the business of the General Meeting. Further details in relation to these arrangements, including the telephone number is in the Notice of General Meeting at the end of this document. Shareholders should note that any such participation via the telephone facility will not constitute formal attendance at the General Meeting and Shareholders will not be able to speak, ask questions or vote on any Resolutions through that facility. Shareholders are therefore encouraged to register their vote in advance of the General Meeting in the ways described below.

The Directors continue to closely monitor the evolving situation in relation to COVID-19 and related guidance issued by the Government, and may, if necessary, make further changes to the arrangements for the General

57 Meeting. Shareholders should continue to monitor the Company’s website www.mbplc.com in case there are further changes to the arrangements for the General Meeting.

The Directors are keen to ensure that Shareholders are able to exercise their right to vote and, accordingly, strongly recommends that Shareholders vote on all Resolutions in advance of the General Meeting by completing and returning their proxy forms. As no persons other than a limited number of Company representatives will be permitted to attend the General Meeting, Shareholders should appoint the chairman of the General Meeting (and not any named individual) to act as their proxy, otherwise their votes will be incapable of being cast.

For the avoidance of doubt, it will not be possible to vote in person at the General Meeting.

Details on how to submit proxy forms are set out in paragraph 15 of this Part I.

Resolution 1 – Directors’ authority to issue the New Shares

Resolution 1 authorises the Directors to issue New Shares pursuant to or in connection with the Open Offer up to an aggregate nominal value of £14,259,254, which is equal to approximately 38.9 per cent. of the nominal value of the current issued share capital of the Company as at 19 February 2021 (being the latest practicable date prior to publication of this document). Such authority will expire three months after the date on which the resolution is passed. However, the Company may make an offer or agreement in connection with the Open Offer before such time which requires the New Shares to be allotted after that time. The Company did not hold any Shares as treasury shares as at 19 February 2021 (being the latest practicable date prior to publication of this document).

Resolution 2 – Discount of greater than 10 per cent. to middle market price of the Shares

Resolution 2 authorises the Directors to issue up to 166,937,606 Shares pursuant to the Open Offer at the Offer Price, which represents a discount of 36 per cent. to the middle market price of the Company’s Shares as at 12 February 2021 (being the last Business Day prior to the Announcement). This resolution is required under Listing Rule 9.5.10(3)(a) to approve the issue of the New Shares at a discount in excess of 10 per cent. to the middle market price of the Shares as at 12 February 2021 (being the last Business Day prior to the Announcement). In setting the Offer Price, the Directors have considered the process by which the Shares need to be offered to investors to ensure the success of the Open Offer and raise a significant level of equity compared to the market capitalisation of the Company. The Directors believe that both the Offer Price and the discount are appropriate.

Resolution 3 – Implementation of Open Offer

Resolution 3 authorises the Directors to implement the Open Offer.

Each of the Resolutions are ordinary resolutions and will pass if a simple majority of the votes cast (either in person or by proxy) are in favour. Each of the Resolutions is conditional on all of the other Resolutions being passed because: (a) all of the Resolutions are required to be passed in order for the Open Offer to complete successfully; and (b) certain of the Resolutions, if passed, would not be effective to complete the Open Offer unless certain other Resolutions are passed.

12. Overseas Shareholders

The attention of Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Shares for the benefit of such persons (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward this document, an Application Form and any other document in relation to the Open Offer to such persons, is drawn to the information which appears in paragraph 8 of Part III – Terms and Conditions of the Open Offer. In particular, subject to certain exceptions, the Open Offer is not being made to Shareholders in the United States or in any other Excluded Territory.

In each case, subject to certain exceptions, neither this document nor an Application Form will be sent to Shareholders with registered addresses, or who are resident or located, in an Excluded Territory, nor will the CREST stock account of Shareholders with registered addresses, or who are resident or located, in an Excluded Territory, be credited with Open Offer Entitlements or Excess Open Offer Entitlements. The notice in the

58 London Gazette referred to in paragraph 10 of Part III – Terms and Conditions of the Open Offer of this document will state where an Application Form may be inspected or obtained. Any person with a registered address, or who is resident or located, in the United States or any other Excluded Territory who obtains a copy of this document or an Application Form is required to disregard them, except with the consent of the Company.

Notwithstanding any other provision of this document or the Application Form, the terms of the Open Offer relating to Overseas Shareholders may be waived, varied or modified as regards specific Shareholders or on a general basis by the Company in its absolute discretion.

In addition, Overseas Shareholders should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to purchase or subscribe for New Shares.

13. Taxation

Your attention is drawn to Part IX – Taxation. If you are in any doubt as to your tax position, you should consult your own professional adviser without delay.

14. Share Schemes

Outstanding options and awards granted under the Share Schemes may be adjusted in accordance with the rules of the relevant Share Scheme for any effect that the Open Offer may have on those options and awards. Participants in the Share Schemes will be contacted separately with further information on their rights and how their options and awards will be affected by the Open Offer. Participants in the Mitchells & Butlers Share Incentive Plan will be contacted separately regarding participation in the Open Offer as beneficial holders of Shares held in the Share Incentive Plan.

15. Actions to be taken

Whether or not you intend to participate in the General Meeting pursuant to the measures described in the Notice of General Meeting at the end of this document, you are required to submit your proxy, appointing the chairman of the General Meeting as your proxy, in order to vote at the General Meeting.

You can register the appointment of a proxy or proxies, or voting instructions for the General Meeting, electronically by logging on to www.sharevote.co.uk. You will need to use your Voting ID, Task ID and Shareholder Reference Number printed on your Form of Proxy. Full details of the procedure are given on the website, www.sharevote.co.uk. The proxy appointment and/or voting instructions must be received by 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours (excluding non-working days) prior to the time fixed for the holding of the adjourned meeting). Please note that any electronic communication sent to the Company or Equiniti that is found to contain a computer virus will not be accepted. The use of the internet service in connection with the General Meeting is governed by Equiniti’s conditions of use set out on the website, www.sharevote.co.uk, which may be read by logging on to that site.

Instead of voting online, you may complete and return the Form of Proxy enclosed in this pack or a downloaded proxy form to the Registrar, Equiniti. Note that due to the COVID-19 pandemic, the postal services cannot be guaranteed and Shareholders are therefore urged to vote online at www.sharevote.co.uk.

If you hold Existing Shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the Notice of General Meeting at the end of this document on page 176.

For the avoidance of doubt, it will not be possible to vote in person at the General Meeting.

59 If you are a Qualifying Non-CREST Shareholder you will be sent an Application Form giving you details of your Open Offer Entitlements and Excess Open Offer Entitlements by post on or about 23 February 2021. If you are a Qualifying CREST Shareholder, you will not be sent an Application Form. Instead, you will receive a credit to your appropriate stock accounts in CREST in respect of the Open Offer Entitlements and Excess Open Offer Entitlements, which it is expected will take place as soon as practicable after 8.00 a.m. on 24 February 2021.

If you sell or have sold or otherwise transferred all of your Shares held (other than ex-entitlement) in certificated form before 8.00 a.m. on 22 February 2021, please forward this document and any Application Form, if and when received, at once to the purchaser or transferee or the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee, except that such documents should not be sent to any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including, but not limited to, the United States and the other Excluded Territories.

If you sell or have sold or otherwise transferred only part of your holding of Existing Shares (other than ex- entitlement) held in certificated form prior to the Ex-Entitlement Date, please retain these documents and consult the stockbroker, bank or other agent through whom the sale or transfer was effected.

If you sell or have sold or otherwise transferred all or some of your Shares (other than ex-entitlement) held in uncertificated form prior to the Ex-Entitlement Date, a claim transaction will automatically be generated by Euroclear which, on settlement, will transfer the appropriate number of Open Offer Entitlements and Excess Open Offer Entitlements to the purchaser or transferee.

The latest time and date for acceptance and payment in full in respect of the Open Offer is expected to be 11:00 a.m. on 10 March 2021, unless otherwise announced by the Company. The procedure for acceptance and payment is set out in Part III – Terms and Conditions of the Open Offer of this document and, if applicable, in the Application Form.

For Qualifying Non-CREST Shareholders who purchase New Shares, such New Shares will be issued in certificated form and will be represented by definitive share certificates, which are expected to be despatched by no later than 23 March 2021 to the registered address of the person(s) entitled to them.

For Qualifying CREST Shareholders who purchase New Shares, the Receiving Agent will instruct CREST to credit the stock accounts of the Qualifying CREST Shareholders with such New Shares. It is expected that this will take place as soon as practicable after 8.00 a.m. on 12 March 2021.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsor regarding the action to be taken in connection with this document and the Open Offer.

If you are in any doubt as to the action you should take, you should immediately seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the FSMA or, if you are outside the United Kingdom, by another appropriately authorised independent financial adviser.

16. Further information

Your attention is drawn to the further information set out in Part II – Some Questions and Answers about the Open Offer to Part XII – Definitions and Glossary (inclusive) of this document. Your attention is also drawn to paragraph 14 of Part X – Additional Information. Shareholders should read the whole of this document and not rely solely on the information set out in this letter. In addition, you should consider the Risk Factors starting on page 15 of this document.

17. Importance of your vote

Your attention is again drawn to the fact that the Open Offer is conditional and dependent upon, amongst other things, the Resolutions, all of which are inter-conditional, being passed at the General Meeting.

If the Resolutions are not passed and the Open Offer does not proceed:

- the waivers and consents the Group has agreed in relation to the WBS financing (to the extent they have come into effect) are likely be withdrawn on 30 April 2021 by Ambac and the Trustee (being the

60 date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers) or will not come into effect and the WBS Group will therefore expect to be in default under the WBS financing, exposing the WBS Group to enforcement action by Ambac and the Trustee (see “ – 2021 WBS Amendments and Waivers” below);

- the new unsecured revolving credit facilities entered into (which are contingent on the Open Offer) will become unavailable to the Group such that the Group would have insufficient funds available to it to repay its existing facilities as it is anticipated that the Group would breach a number of financial covenants in those existing facilities on 10 April 2021 (see “ – The New Debt Package” below); consequently

- the Directors will be required to take mitigating actions, however, the Directors are not confident that such mitigating actions would be successful; and therefore,

- the most likely outcome would be that the Shareholders would lose all or a substantial part of the value of their investments in the Company.

Shareholders are therefore asked to vote in favour of the Resolutions at the General Meeting in order for the Open Offer to proceed. The Directors believe that successful completion of the Open Offer is of critical importance to the Group’s future prospects and will: (i) strengthen the Group’s ability to service its short and long-term working capital requirements by facilitating the satisfaction of a key condition to the New Debt Package; (ii) facilitate the satisfaction of the condition to the 2021 WBS Amendments and Waivers requiring successful completion of the Open Offer so as to waive a number of breaches/defaults by the WBS Group of certain provisions of the WBS and ensure that the WBS Group has sufficient resources and the flexibility to cope with the impact of the COVID-19 pandemic on the revenues of the WBS Estate; (iii) provide it with the financial flexibility to emerge from the difficulties of the current COVID-19 crisis; (iv) enhance the confidence of the Group’s suppliers, partners and investors; and (v) position it to continue its strategic development.

The Group’s financing arrangements consist of

- unsecured Existing Facilities and as described further in paragraph 10.1.2(a) of Part X – Additional Information (the Existing Facilities); and

- a secured corporate debt financing structure (the WBS) established by a sub-group within the Group as described further in paragraph 10.1.2(c) of Part X – Additional Information.

The New Debt Package

As set out at paragraph 10.1.2(a) of Part X – Additional Information, the Company has agreed the terms of the New Debt Package which, when taken together with the Open Offer, will be sufficient to refinance £200 million of the Group’s existing debt, being all of the Group’s existing unsecured debt facilities save for the Santander CLBILS of £50 million which may remain outstanding (the Refinanced Facilities). The Existing Facilities all mature on 31 December 2021. As at the date of this document, the Existing Facilities are all fully drawn.

The New Debt Package is conditional upon completion of the Open Offer, which itself is contingent on the passing of all the Resolutions. Consequently, if any of the Resolutions relating to the Open Offer are not approved and the Open Offer is not completed successfully, the New Debt Package will lapse and cease to be available to the Company. The New Debt Package is not, however, conditional on the 2021 WBS Amendments and Waivers set out below (and there would be no default under the New Debt Package in relation to the WBS Group, including if the 2021 WBS Amendments and Waivers were not in place).

Failure to complete the New Debt Package would mean that the Group would breach a number of financial covenants in the Existing Facilities on 10 April 2021. The minimum liquidity headroom in the Existing Facilities as at the end of each four-week accounting period would need to be maintained. The next four test dates are 13 March 2021, 10 April 2021, 8 May 2021 and 5 June 2021. The minimum liquidity headroom required by the Existing Facilities is £30 million as at 13 March 2021 and £25 million as at 10 April 2021 and at the end of each four-week accounting period thereafter. The Company expects that it would not meet this requirement for the first time on 10 April 2021 with a shortfall of £32 million. The minimum liquidity covenant under each of the Existing Facilities has been waived from launch of the Open Offer until the earliest of six weeks after such launch, receipt of proceeds from the Open Offer and 31 May 2021. At the end of the waiver

61 period, the Company must ensure that the minimum liquidity covenant was met at the previous test dates. The remaining financial covenants do not apply until the test date on 10 April 2021. At that date, the relevant test would be in respect of the ratio of the EBITDAR of members of the Unsecured Group to net rent payable plus interest, for each of the two preceding quarterly testing dates. The Company would fail this test on that date, with an EBITDAR shortfall of £53 million. Such breaches would constitute events of default under the Existing Facilities entitling the Lenders to declare all amounts outstanding under the Existing Facilities (approximately £250 million as at 19 February 2021) as immediately due and payable, and to take enforcement action against the Group.

The Directors do not expect the Group to have sufficient funds available to repay the expected amounts due in such circumstances. In the absence of being able to agree or implement successfully any of the alternatives arrangements considered below, enforcement action by the Lenders (by way of accelerating their loans insolvency proceedings) would likely result in Shareholders losing all or a substantial part of the value of their investment in the Company.

2021 WBS Amendments and Waivers

In addition to the unsecured financing arrangements of the Group described above, the Borrower established, in November 2003, the WBS pursuant to which the Issuer was established to issue secured notes, the proceeds of which were on-lent to the Borrower under the Issuer/Borrower Facility Agreement which imposes certain covenants on the Borrower and the WBS Group. The Borrower must dedicate a portion of the cash flow (which amounted to £197 million in FY19, the last full year prior to the COVID-19 pandemic) generated from the restaurants, pubs and bars owned by the WBS Group to service its debt obligations under the Issuer/Borrower Facility Agreement which the Issuer then uses to make payments in respect of the issued notes.

As a result of the impact of the COVID-19 pandemic and the various measures taken by the Government and the devolved administrations in the United Kingdom to stem the spread of the pandemic, requiring closure of, or restriction on operations and/or capacity within the WBS Estate since March 2020, the WBS Group has been unable to comply with a number of the covenants set out in the Issuer/Borrower Facility Agreement. In June 2020, Ambac and the Trustee granted the 2020 WBS Amendments and Waivers, including waivers of non-payment events of default arising as a result of failure by the Borrower to pay its full debt service to the Issuer for the loan payment dates in June 2020 up to and including December 2020 and a waiver of the requirement to comply fully with the Debt Service Covenant up to and including April 2021. However, given the continuing impact of the COVID-19 pandemic and the ongoing measures requiring closures of, and restrictions on operations within, the WBS Estate, the Borrower requires extensions to, and further

62 modifications in respect of, the 2020 WBS Amendments and Waivers so as to address further breaches of the Issuer/Borrower Facility Agreement which will occur upon the expiry of the 2020 WBS Amendments and Waivers.

As set out in paragraph 10.1.2(c) of Part X – Additional Information, the Company and the Borrower have negotiated with Ambac and the Trustee the 2021 WBS Amendments and Waivers.

Under the terms of the 2021 WBS Amendments and Waivers, a number of the amendments/waivers apply with effect from 14 February 2021 (including amendments in relation to a 30-day suspension of business provision (effective as of 31 December 2020) and the waivers and amendments in relation to the failure by the WBS Group to pay in full the debt service over the next three quarters), whilst a number of other amendments and waivers thereunder will only come into effect upon receipt by the Company of the proceeds of the Open Offer (including amendments in relation to the debt service coverage ratio covenant, facilitating disposals of properties by the WBS Group and lifting a restriction on making acquisitions). To the extent that the Open Offer is not completed successfully by 30 April 2021, Ambac and the Trustee will be entitled to withdraw their respective consents to those amendments and waivers which came into effect on 14 February 2021, and the balance of the amendments and waivers under the 2021 WBS Amendments and Waivers would not come into effect at all.

The absence and/or withdrawal of the 2021 WBS Amendments and Waivers would mean that the Borrower would immediately be in breach of a number of provisions of the Issuer/Borrower Facility Agreement with effect from such date of withdrawal. In particular, the waiver of the note payment date of 15 March 2021 and the waiver that allows for the deferral of the repayment of £9 million drawn on the Liquidity Facility and a further £50.7 million drawing in March 2021 would, following such withdrawal, be ineffective and the Group does not expect that the WBS Group would have sufficient funds to repay these amounts should they become immediately due and payable. In addition, under the 2020 WBS Amendments and Waivers, the WBS financial covenants are currently fully waived until the test date at the end of July 2021. At that date, the relevant test would be in respect of the free cashflow to debt service for the preceding two quarters. In the absence of the 2021 WBS Amendments and Waivers, the test would be failed at that date, with an estimated free cashflow shortfall of £122 million. Such breaches would constitute events of default under the Issuer/Borrower Facility Agreement entitling Ambac to instruct the Trustee to declare the principal amount outstanding (£1,580 million as at 19 February 2021) and all other sums payable under the Issuer/Borrower Facility Agreement to be immediately due and repayable. In the event that all amounts outstanding under the Issuer/Borrower Facility Agreement were declared immediately due and repayable, certain other amounts may also become due and payable including, for example, terminationamounts in respect of the related hedging arrangements (the mark- to-market value of which is currently around £250 million).

If the Open Offer does not proceed, the Company and the Borrower would put in place an action plan to seek to avoid the possibility of enforcement action by the Trustee and Ambac, in light of the expected event of default on all of its financing arrangements. The Directors expect that the Company and the Borrower would seek to obtain waivers, amendments and/or standstills, although Ambac and the Trustee have given no indication that such waivers, amendments and/or standstills would be forthcoming.

63 If the Open Offer does not proceed, the Directors expect that the Group would also look to obtain alternative financing so as to give Ambac and the Trustee comfort that the WBS Group will have sufficient financial support to be able to continue to run its business and service its debt obligations under the Issuer/Borrower Facility Agreement, such that Ambac and the Trustee agree not to take enforcement action with respect to the Borrower Security. To date, Ambac and the Trustee have given no indication that their consent would be forthcoming if the Open Offer is not completed. The Directors believe that such consent would only be provided by Ambac and the Trustee at significant cost to the Group in the form of additional fees payable to Ambac and possibly other secured creditors of the WBS Group and/or additional restrictions on, or commitments to engage in, corporate actions (such as the restriction of payment of dividends by the WBS Group to the wider Group, acquisitions and disposals), each of which would adversely affect or delay implementation of the Group’s strategies and may ultimately be unsustainable.

It should be noted that even if the Open Offer is completed successfully and the requisite portion of the proceeds thereof are put into the WBS Group, the WBS Group will still need the 2021 WBS Amendments and Waivers in respect of the breach the debt service coverage ratio covenant and certain other covenants because such covenants will not be cured by the amount of equity which will be put into the WBS Group. As set out in paragraph 10.1.2(c) of Part X – Additional Information, compliance with such covenants will only be possible once the WBS Estate is able to reopen and trade sufficiently so as to generate enough revenue, which is why the 2021 WBS Amendments and Waivers in respect of the relevant covenants are permitted to apply up to until January 2023.

In addition, the Odyzean Group has entered into an irrevocable undertaking with the Company to vote in favour of the Resolutions to be proposed at the General Meeting and to subscribe for its pro rata entitlement under the Open Offer and to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility. However, if the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement. If the Underwriting Agreement is terminated, the Open Offer will not be successfully completed, as a result of which the New Debt Package will lapse and cease to be available to the Company and Ambac and the Trustee would be entitled to withdraw their respective consents to the waivers in effect under the 2021 WBS Amendments and Waivers by 30 April 2021. This would result in events of default under the Existing Facilities and the Issuer/Borrower Facility Agreement (which will occur on 10 April 2021 with respect to the Existing Facilities and, with respect the Issuer/ Borrower Facility, would be expected to occur on 30 April 2021 (being the date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers in the event that the Open Offer has not been completed by then)). These events of default would be likely to result in Shareholders losing all or a substantial part of the value of their investment in the Company.

Conclusion

The Directors believe that the Open Offer is critical to avoiding events of default under the Existing Facilities and the Issuer/Borrower Facility Agreement (which will occur on 10 April 2021 with respect to the Existing Facilities and, with respect the Issuer/Borrower Facility, would be expected to occur on 30 April 2021 (being the date on which Ambac and the Trustee may withdraw their consents to the 2021 WBS Amendments and Waivers in the event that the Open Offer has not been completed by then)), and therefore for the continued operation and financial stability of the Group (including the WBS Group) and, in addition, that (i) the New Debt Package represents a favourable option in respect of the refinancing of the Company’s Existing Facilities and (ii) the 2021 WBS Amendments and Waivers are essential in order to prevent a breach of certain provisions of the WBS financing which would put the WBS Group, and the assets of the WBS Estate, at risk of being subject to enforcement action.

For these reasons, it is essential that Shareholders vote in favour of the Resolutions, as the Directors consider the Open Offer to be a critical transaction for the Company and to be the best transaction available to the Company, its Shareholders and its stakeholders as a whole in the current circumstances.

18. Recommendation and voting intentions

The Directors believe the Open Offer and the Resolutions to be in the best interests of the Shareholders as a whole. Accordingly, the Directors unanimously recommend that the Shareholders vote in favour of the Resolutions to be proposed at the General Meeting to approve the Open Offer, as the Directors each

64 intend to do in respect of their own legal and beneficial holdings, amounting to 473,706 Existing Shares (representing approximately 0.1 per cent. of the Company’s existing issued ordinary share capital as at 19 February 2021 (being the latest practicable date prior to the publication of this document)).

Yours faithfully, for and on behalf of Mitchells & Butlers plc

Bob Ivell Chairman

65 PART II – SOME QUESTIONS AND ANSWERS ABOUT THE OPEN OFFER

The questions and answers set out in this Part II are intended to be in general terms only and, as such, you should read Part III – Terms and Conditions of the Open Offer of this document for full details of what action you should take in connection with the Open Offer. If you are in any doubt as to what action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser, duly authorised under the FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This Part II deals with general questions relating to the Open Offer and more specific questions relating to Shares held by persons resident in the United Kingdom who hold their Shares in certificated form only. If you are an Overseas Shareholder, you should read paragraph 8 of Part III – Terms and Conditions of the Open Offer of this document and you should take professional advice as to whether you are eligible and/or you need to observe any formalities to enable you to take up your entitlements. If you hold your Shares in uncertificated form (that is, through CREST) you should read Part III – Terms and Conditions of the Open Offer of this document for full details of what action you should take. If you are a CREST sponsored member, you should also consult your CREST sponsor. If you do not know whether your Shares are in certificated or uncertificated form, please call Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Times and dates referred to in this Part II have been included on the basis of the expected timetable for the Open Offer set out in Part III – Terms and Conditions of the Open Offer of this document.

1. What is an open offer?

An open offer is a way for companies to raise money. Companies do this by giving their existing shareholders a right to acquire further shares at a fixed price in proportion to their existing shareholdings. The fixed price is normally at a discount to the closing mid-market price of the existing ordinary shares prior to the announcement of the open offer.

2. What is the Company’s Open Offer?

The offer under the Company’s Open Offer is an invitation by the Company to Qualifying Shareholders to apply to subscribe for up to 166,937,606 New Shares at a price of 210 pence per New Share. If you hold Shares on the Record Date or have a bona fide market claim, other than those Shareholders with a registered address in the Excluded Territories (subject to certain exceptions), you will be entitled to subscribe for New Shares under the Open Offer unless you have sold or otherwise transferred those Shares (other than ex- entitlement) prior to the Ex-Entitlement Date. If you hold your Existing Shares in certificated form, your entitlement will be set out in your Application Form, which has been sent to you with this document.

New Shares are being offered to Qualifying Shareholders in the Open Offer at a discount to the share price on the last dealing day before the details of the Open Offer were announced on 12 February 2021. The Offer Price of 210 pence per New Share represents a 36 per cent. discount to closing middle-market price quotation as derived from the London Stock Exchange’s Daily Official List of 328.5 pence per Share on 12 February 2021, the last Business Day prior to the date of the Announcement.

The Open Offer is on the basis of 7 New Shares for every 18 Existing Shares held by Qualifying Shareholders on the Record Date. If your entitlement to New Shares is not a whole number, your fractional entitlement will be rounded down to the nearest whole number (or zero) and such fractional entitlements will not be allotted to Shareholders and will be discarded. Applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements. Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer.

In addition, and subject to availability, the Excess Application Facility will enable Qualifying Shareholders who take up their Open Offer Entitlements in full to apply for any whole number of Excess Shares in excess of their Open Offer Entitlements. The Excess Application Facility will comprise New Shares that are offered to Qualifying Shareholders under the Open Offer as Open Offer Entitlements but are not taken up. Qualifying

66 Shareholders’ applications for Excess Shares will, therefore, be satisfied only to the extent that applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements. The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. All applications under the Excess Application Facility will be subject to the Excess Application Cap which has been set at a level that ensures that the Odyzean Group's commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch. If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by the Excess Allocation Method. Further details regarding the Excess Allocation Method are set out in paragraph 2 of Part III—Terms and Conditions of the Open Offer.

If the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement. The aggregate number of New Shares available for subscription pursuant to the Open Offer (including any New Shares that may be issued under the Excess Application Facility) will not exceed 166,937,606 New Shares.

New Shares for which application has not been made under the Open Offer (including the Excess Application Facility) will not be sold in the market for the benefit of those who do not apply under the Open Offer and Qualifying Shareholders who do not apply to take up their entitlements will have no rights nor receive any benefit under the Open Offer. New Shares not taken up by Shareholders under the Open Offer will be allocated to Qualifying Shareholders who apply under the Excess Application Facility (in accordance with the Excess Allocation Method) with the proceeds ultimately accruing for the benefit of the Company. The Odyzean Group has committed to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility.

Shareholders should note that the Open Offer is conditional, inter alia, upon:

(a) the passing of the Resolutions at the General Meeting without material amendment;

(b) the Underwriting Agreement having become or been declared unconditional in all respects save for the condition relating to Admission of the New Shares; and

3. What is an Application Form?

It is a form sent to those Qualifying Shareholders who hold their Shares in certificated form. It sets out your Open Offer Entitlements to apply for the New Shares and Excess Open Offer Entitlements and is a form which you should complete if you want to participate in the Open Offer.

4. What if I have not received an Application Form?

If you have not received an Application Form and you hold your Shares in certificated form, this probably means that you are not eligible to participate in the Open Offer. Some Qualifying Shareholders, however, will not receive an Application Form but may still be able to participate in the Open Offer, including:

(a) Qualifying Shareholders who hold their Shares in uncertificated form (i.e. in CREST); and

67 (b) Qualifying Shareholders who hold Shares in certificated form and who bought Shares prior to the Ex Entitlement Date but were not registered as the holders of those Shares at the Record Date (see question 5).

5. If I bought Shares before 22 February 2021 (the Ex-Entitlement Date) will I be eligible to participate in the Open Offer?

If you bought Shares before the Ex-Entitlement Date but you are not registered as the holder of those Shares at close of business on 17 February 2021 (the Record Date) you may still be eligible to participate in the Open Offer. If you are in any doubt, please consult your stockbroker, bank or other appropriate financial adviser, or whoever arranged your share purchase, to ensure you claim your entitlement. You will not be entitled to the New Shares in respect of any Shares acquired on or after the Ex-Entitlement Date.

6. I hold my Shares in uncertificated form in CREST. What do I need to do in relation to the Open Offer?

CREST members should follow the instructions set out in Part III – Terms and Conditions of the Open Offer. Persons who hold Shares through a CREST member should be informed by the CREST member through whom they hold their Shares of the number of New Shares which they are entitled to take up under the Open Offer and should contact them if they do not receive this information.

7. I hold my Shares in certificated form. How do I know I am eligible to participate in the Open Offer?

If you receive an Application Form and are not a Shareholder with a registered address in the United States or any other Excluded Territory, and, subject to certain limited exceptions, are not physically located in the United States or any other Excluded Territory, then you should be eligible to participate in the Open Offer as long as you have not sold all of your Shares before the Ex-Entitlement Date. If you are in any doubt as to whether you are eligible to participate, you are recommended to seek your own independent legal advice.

8. I hold my Shares in certificated form. How do I know how many New Shares I am entitled to take up?

Subject to Shareholders approving each of the Resolutions at the General Meeting to be held at 10.00 a.m. on 11 March 2021, if you hold your Shares in certificated form and, subject to certain limited exceptions, do not have a registered address in the United States or any other Excluded Territory, you will be sent an Application Form that shows:

- In Box 1, how many Shares you held at the Record Date;

- In Box 2, how many New Shares are comprised in your Open Offer Entitlements;

- In Box 3, how much you need to pay in pounds sterling if you want to apply for all of your Open Offer Entitlements; and

- In Box 4, the maximum number of Excess Shares which you may apply for.

If you would like to apply for any Excess Shares (i.e. New Shares in excess of your Open Offer Entitlements which have not been applied for by other Qualifying Shareholders) pursuant to the Excess Application Facility, you should complete the Application Form in accordance with the instructions printed on it and the information provided in this document.

9. I am a Qualifying Shareholder and I hold my Existing Shares in certificated form. What are my choices in relation to the Open Offer?

(a) If you do not want to take up your Open Offer Entitlements

If you do not want to take up your Open Offer Entitlements you do not need to do anything. In these circumstances, you will not receive any New Shares. You will also not receive any money when the New Shares you could have taken up are sold, as might happen under a rights issue. You cannot sell your Open Offer Entitlements or Excess Open Offer Entitlements to anyone else. If you do not return your Application Form applying for the New Shares to which you are entitled by 11.00 a.m. on 10 March 2021, such New

68 Shares will be made available for subscription under the Excess Application Facility. The Odyzean Group has committed to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility.

Shareholders who do not wish to take up their Open Offer Entitlements are, however, encouraged to vote at the General Meeting by submitting a proxy electronically by going to www.sharevote.co.uk and following the instructions provided in the Notice of General Meeting. To be valid, the electronic submission must be registered by not later than 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours prior to the time fixed for the holding of the adjourned meeting). Shareholders will need to use a 25-digit number made up of their Voting ID, Task ID and Shareholder Reference Number printed on their Form of Proxy. Full details of the procedure are given on the website, www.sharevote.co.uk.

The Directors are keen to ensure that Shareholders are able to exercise their right to vote and, accordingly, strongly encourage shareholders to vote on all Resolutions in advance of the General Meeting by completing their proxy forms. Shareholders should appoint the chairman of the meeting (and not any named individual) to act as their proxy, otherwise their votes will be incapable of being cast.

For the avoidance of doubt, it will not be possible to vote in person at the General Meeting.

If you do not take up your Open Offer Entitlements, then following the issue of the New Shares pursuant to the Open Offer, your interest in the Company will be diluted by up to approximately 28.0 per cent. (assuming no options granted under the Share Schemes are exercised between 19 February 2021, being the latest practicable date prior to the publication of this document, and Admission becoming effective).

(b) If you want to take up some but not all of the New Shares under your Open Offer Entitlements

If you want to take up some but not all of the New Shares under your Open Offer Entitlements, you should write the number of New Shares you want to take up in Box 5 of your Application Form; for example, if you have an Open Offer Entitlements for 50 New Shares but you only want to apply for 25 New Shares, then you should write “25” in Box 5.

To work out how much you need to pay for the New Shares, you need to multiply the number of New Shares you want (in this example, “25”) by 210 pence giving you an amount of 5,250 pence in this example.

You should write this total sum in Box 8 rounding down to the nearest whole pence, and this should be the amount your cheque or banker’s draft is made out for. You should then return the completed Application Form, together with a cheque or banker’s draft for that amount, in the accompanying pre-paid envelope by post to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received by no later than 11.00 a.m. on 10 March 2021, after which time Application Forms will not be valid. If you post your Application Form by first class post, it is recommended that you allow for at least four Business Days for delivery.

A definitive share certificate will then be sent to you for the New Shares that you take up. Your definitive share certificate for New Shares is expected to be despatched to you within 14 days of Admission of the New Shares.

If you want to take up all of the New Shares to which you are entitled, all you need to do is sign page one of the Application Form (ensuring that all joint holders sign (if applicable)) and send the Application Form, together with your cheque or banker’s draft for the amount (as indicated in Box 3 of your Application Form), payable to “Equiniti Ltd re: Mitchells & Butlers Open Offer” and crossed “A/C payee only”, in the accompanying pre-paid envelope by post to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received no later than 11.00 a.m. on 10 March 2021, after which time the Application Forms will not be valid. If you post your Application Form by first class post, it is recommended that you allow at least four Business Days for delivery.

(d) If you want to take up Excess Shares pursuant to the Excess Application Facility

69 If you have taken up all of your Open Offer Entitlements and you want to apply for Excess Shares you may do so by completing Boxes 5, 6, 7, and 8 of the Application Form, noting that the maximum number of Excess Shares which you may apply for is set out in Box 4. However, the maximum number of New Shares to be issued is fixed and will not be increased in response to any applications under the Excess Application Facility. Applications under the Excess Application Facility will therefore only be satisfied to the extent of any basic entitlements not taken up by other Qualifying Shareholders.

The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. All applications under the Excess Application Facility will be subject to the Excess Application Cap which has been set at a level that ensures that the Odyzean Group’s commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch. If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by the Excess Allocation Method. Further details regarding the Excess Allocation Method are set out in paragraph 2 of Part III – Terms and Conditions of the Open Offer. Excess monies will be returned as soon as reasonably practicable thereafter, without payment of interest and at the applicant’s sole risk. In this event, Qualifying Non-CREST Shareholders will receive the refund either as a cheque by first class post to the address set out on the Application Form or returned direct to the account of the bank or building society on which the relevant cheque or banker’s draft was drawn, as soon as practicable, not later than 10 Business Days following the date on which the results of the Open Offer are announced.

Each Qualifying CREST Shareholder will receive a credit to his or her CREST Stock Account of his or her Open Offer Entitlements which will be equal to the number of New Shares for which he or she is entitled to apply under the Open Offer. Each Qualifying CREST Shareholder will also receive a credit to his or her CREST Stock Account of his or her Excess Open Offer Entitlement which will be equal to their Excess Application Cap. Qualifying CREST Shareholders should note that this is a cap on the maximum number of Excess Shares they can apply for. They should refer to paragraph 2 of Part III – Terms and Conditions of the Open Offer for further detail regarding the Excess Application Facility. Entitlements to New Shares will be rounded down to the nearest whole number (or zero) and any Open Offer Entitlements have been rounded down accordingly.

(e) Payment

All payments should be in pounds sterling and made by cheque or banker’s draft made payable to “Equiniti Ltd re: Mitchells & Butlers Open Offer” and crossed “A/C payee only”. Cheques or banker’s drafts must be drawn on an account at a bank or building society or a branch of a bank or building society which must be in the United Kingdom or the Channel Islands and which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques or banker’s drafts to be cleared through the facilities provided by either of those companies. Cheques and banker’s drafts must bear the appropriate sorting code number in the top right-hand corner and must be for the full amount payable on application. Post-dated cheques will not be accepted.

Cheques drawn on a non-United Kingdom bank will be rejected. Third party cheques may not be accepted with the exception of building society cheques or banker’s drafts which either have the building society or bank branch stamp or are provided with a supporting letter confirming the source of funds. The account name should be the same as that shown on page 1 of the Application Form. Where the building society or bank has confirmed the relevant Qualifying Shareholder has title to the underlying funds cheques or banker’s drafts must be drawn on an account at a bank or building society or a branch of a bank or building society which must be in the United Kingdom, the Channel Islands or the Isle of Man and which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker’s drafts to be cleared through the facilities provided by either of those companies. Cheques and banker’s drafts must bear the appropriate sorting code number in the top right-hand corner. Post-dated cheques will not be accepted.

The Company reserves the right to have cheques and banker’s drafts presented for payment on receipt. Payments via CHAPS, BACS or electronic transfer will not be accepted. No interest will be paid on payments made before they are due. It is a term of the Open Offer that cheques will be honoured on first presentation and the Company may elect to treat as invalid acceptances in respect of which cheques are not so honoured. All documents, cheques and banker’s drafts sent through the post will be sent at the risk of the sender.

70 10. I am a Qualifying Shareholder; do I have to apply for all the New Shares I am entitled to apply for?

You can take up any number of the New Shares allocated to you under your Open Offer Entitlements, and you can also apply for Excess Shares pursuant to the Excess Application Facility provided you have taken up your Open Offer Entitlements in full. Your maximum Open Offer Entitlement is shown on your Application Form in Box 2. Any applications by a Qualifying Shareholder for a number of New Shares which is equal to or less than that person’s Open Offer Entitlements will be satisfied, subject to the Open Offer becoming unconditional. Excess applications will be satisfied only to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their pro rata entitlements.

If the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement. If you decide not to take up all of the New Shares comprised in your Open Offer Entitlements, then your proportion of the ownership and voting interest in the Company will be reduced.

Please refer to answers (a) to (e) of question 9 for further information.

11. What if the number of New Shares to which I am entitled is not a whole number? Am I entitled to fractions of New Shares?

Your entitlement to New Shares will be calculated at the Record Date (other than in the case of those who bought shares after the Record Date but prior to 8.00 a.m. on 22 February 2021 who may be eligible to participate in the Open Offer). If your entitlement to New Shares is not a whole number, your fractional entitlement will be rounded down in calculating your entitlement to New Shares and such fractional entitlements will be discarded.

12. Will I be taxed if I take up my entitlements?

If you are resident in the United Kingdom for United Kingdom tax purposes, you will not have to pay United Kingdom tax when you take up your entitlement to apply for New Shares, although the Open Offer may affect the amount of United Kingdom tax you pay when you sell your Shares.

The statement above is made on the same basis as and subject to the same assumptions and caveats as set out in paragraph 1 of Part IX – Taxation. In particular, it does not consider or extend to the tax position of certain categories of Shareholders who are subject to special rules (such as persons acquiring their New Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes). For further information, Qualifying Shareholders who are resident in the United Kingdom for tax purposes are directed to paragraph 1 of Part IX – Taxation

Qualifying Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult an appropriate professional adviser as soon as possible. Please note that Equiniti will not be able to assist you with taxation issues.

13. What should I do if I live outside the United Kingdom?

Your ability to apply for New Shares may be affected by the laws of the country in which you live and you should take professional advice as to whether you require any governmental or other consents or need to observe any other formalities to enable you to take up your Open Offer Entitlements and/or Excess Open Offer Entitlements. Subject to certain exceptions, Shareholders with registered addresses in, or located or resident in, the Excluded Territories including the United States are not eligible to participate in the Open Offer.

71 Shareholders who have registered addresses in or who are resident in, or who are citizens of, all countries other than the United Kingdom should refer to paragraph 8 of Part III – Terms and Conditions of the Open Offer.

14. What should I do if I need further assistance?

If you have any other questions, please call Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Your attention is drawn to the further terms and conditions in Part III – Terms and Conditions of the Open Offer.

The contents of this document or any subsequent communication from the Company, the Underwriters or any of their respective affiliates, officers, directors, employees or agents are not to be construed as legal, financial or tax advice. Each prospective investor should consult his or her own stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser for legal, financial or tax advice.

72 PART III – TERMS AND CONDITIONS OF THE OPEN OFFER 1. Introduction

The Company is proposing to raise proceeds of up to approximately £351 million (before expenses) by way of an Open Offer of up to 166,937,606 New Shares to Qualifying Shareholders.

Subject to the fulfilment of the conditions of the Underwriting Agreement, the Open Offer will be made on the basis of:

7 New Shares at 210 pence per New Share for every 18 Existing Shares held on the Record Date (and so in proportion for any other number of Existing Shares then held) and otherwise on the terms and conditions as set out in this document and, in the case of Qualifying Non- CREST Shareholders, in the Application Form.

Times and dates referred to in this Part III have been included on the basis of the expected timetable for the Open Offer set out on page 43 of this document.

The Offer Price of 210 pence per New Share represents a 36 per cent. discount to the closing price of 328.5 pence per Existing Share on 12 February 2021 (the last Business Day prior to the Announcement). In setting the Offer Price, the Directors have considered the prices at which the New Shares need to be offered to investors to ensure the success of the Open Offer and raise a significant level of equity compared to the market capitalisation of the Company. The Directors believe that both the Offer Price and the discount are appropriate.

Entitlements to New Shares will be rounded down to the nearest whole number (or to zero) and fractional entitlements will not be allotted to Shareholders and will be discarded. Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer. Qualifying Non-CREST Shareholders will have received an Application Form with this document which sets out their basic entitlement to New Shares as shown by the number of Open Offer Entitlements offered to them. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements on 24 February 2021.

Qualifying Shareholders who take up their Open Offer Entitlements in full may apply to subscribe for Excess Shares using the Excess Application Facility. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to and are able to apply to subscribe for more than their Open Offer Entitlements will have Excess Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 5 of this Part III for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The Excess Application Facility will comprise New Shares that are offered to Qualifying Shareholders under the Open Offer as Open Offer Entitlements but are not taken up. Qualifying Shareholders’ applications for Excess Shares will, therefore, be satisfied only to the extent that applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements. The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. All applications under the Excess Application Facility will be subject to the Excess Application Cap which has been set at a level that ensures that the Odyzean Group’s commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch. If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by the Excess Allocation Method. Further details regarding the Excess Allocation Method are set out in paragraph 2 of this Part III – Terms and Conditions of the Open Offer.

The aggregate number of New Shares available for subscription pursuant to the Open Offer (including any New Shares that may be issued under the Excess Application Facility) will not exceed 166,937,606 New Shares (representing approximately 38.9 per cent. of the existing issued share capital and 28.0 per cent. of the Enlarged Share Capital).

73 19 February 2021 (being the latest practicable date prior to the publication of this document) and completion of the Open Offer).

Shareholders or any person (including, without limitation, custodians, nominees and trustees) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the United Kingdom should consider paragraph 8 of this Part III. The offer of New Shares under the Open Offer will not be made into certain territories. Subject to the provisions of paragraph 8 of this Part III, Shareholders with a registered address in an Excluded Territory including the United States are not being sent this document and will not be sent an Application Form.

The results of the Open Offer are expected to be announced on or around 11 March 2021.

The New Shares issued pursuant to the Open Offer will rank pari passu in all respects with the Existing Shares, including the right to receive dividends or other distributions made, paid or declared in respect of the ordinary share capital of the Company after the respective dates of issue of the New Shares. There will be no restrictions on the free transferability of the New Shares save as provided in the Articles. A summary of the rights attaching to the New Shares (which are governed by the Articles) is set out in paragraph 4 of Part X – Additional Information.

The New Shares will be in registered form and capable of being held in certificated form or uncertificated form in CREST. The New Shares issued as part of the Open Offer will together represent approximately 28.0 per cent. of the Enlarged Share Capital.

2. Terms and conditions of the Open Offer

The Open Offer is conditional, inter alia, upon:

(a) the passing of the Resolutions at the General Meeting without material amendment;

(b) the Underwriting Agreement having become or been declared unconditional in all respects save for the condition relating to Admission of the New Shares; and

In the event that these conditions are not satisfied, the Open Offer will not proceed. In such circumstances, application monies will be returned without payment of interest, as soon as practicable thereafter and any Open Offer Entitlements and Excess Open Offer Entitlements admitted to CREST will thereafter be disabled.

A summary of the principal terms of the Underwriting Agreement is set out in paragraph 9.1 of Part X – Additional Information of this document.

Open Offer Entitlements

Subject to the terms and conditions set out below (and, in the case of Qualifying Non-CREST Shareholders, the Application Form), each Qualifying Shareholder is being given an opportunity to apply for New Shares at the Offer Price (payable in full and free of all expenses) on the following pro rata basis:

7 New Shares at 210 pence each for every 18 Existing Shares held and registered in their name at the Record Date and so on in proportion to any other number of Shares then held.

Qualifying Shareholders may apply for any whole number of New Shares. Any fractional entitlements to New Shares will not be allotted to Shareholders and will be discarded. Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements.

Holdings of Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating the Open Offer Entitlements.

74 Excess Application Facility

Qualifying Shareholders who take up their Open Offer Entitlements in full may apply to subscribe for Excess Shares using the Excess Application Facility. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to and are able to apply to subscribe for more than their Open Offer Entitlements will have Excess Open Offer Entitlements credited to their stock account in CREST, and should refer to paragraph 5 of this Part III for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

Each Qualifying Shareholder’s application under the Excess Application Facility will be subject to the Excess Application Cap which will be (the Excess Application Cap):

(i) the number of New Shares for which the relevant Qualifying Shareholder is entitled to subscribe pursuant to their Open Offer Entitlement;

multiplied by

(ii) 0.81739501,

subject to any resulting fractions of Excess Shares being rounded down to the nearest whole number.

Any application made by a Qualifying Shareholder which exceeds the relevant Shareholder’s Excess Application Cap will be deemed to be an application for an amount equal to the relevant Shareholder’s Excess Application Cap.

The Excess Application Cap has been set at a level that ensures that the Odyzean Group’s commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch.

If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by using the following formula (the Excess Allocation Method):

Each Qualifying Shareholder who takes up their Open Offer Entitlements in full and applies for Excess Shares under the Excess Application Facility (an Excess Share Applicant) will be allocated a number of Excess Shares equal to:

(i) the total number of New Shares which have not been applied for by Qualifying Shareholders pursuant to their Open Offer Entitlements;

multiplied by

(ii) the number of Excess Shares applied for by the Excess Share Applicant (being a number up to their Excess Application Cap) divided by the aggregate number of Excess Shares applied for by all Excess Share Applicants,

subject to any resulting fractions of Excess Shares being rounded down to the nearest whole number.

75 apply to take up their entitlements will have no rights nor receive any benefit under the Open Offer. Any New Shares not taken up by Shareholders under the Open Offer will be allocated to Qualifying Shareholders who apply under the Excess Application Facility (in accordance with the Excess Allocation Method) with the proceeds ultimately accruing for the benefit of the Company. The Odyzean Group has committed to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility. The Open Offer will be made to Shareholders by means of a notice in the London Gazette, details of which are provided in paragraph 10 of this Part III.

The attention of Shareholders and any persons (including, without limitation, custodians, nominees and trustees) who have a contractual or other legal obligation to forward this document or an Application Form into a jurisdiction other than the United Kingdom is drawn to paragraph 8 of this Part III relating to Overseas Shareholders, which forms part of the terms and conditions of the Open Offer.

Shareholders who do not, or are not permitted to, acquire the New Shares in the Open Offer will be diluted by up to 28.0 per cent. (assuming no options granted under the Share Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and the issue of New Shares) following the Open Offer.

The results of the Open Offer are expected to be announced on or around 11 March 2021.

Underwriting arrangements and Admission

The Odyzean Group will subscribe for any New Shares not taken up by Shareholders under the Open Offer by 11.00 a.m. on 10 March 2021, including under the Excess Application Facility, with the proceeds ultimately accruing for the benefit of the Company. The Open Offer is therefore fully underwritten.

The Underwriting Agreement may be terminated by the Global Coordinator at any time prior to Admission of the New Shares in certain circumstances (including if any condition under the Underwriting Agreement has not been satisfied or waived), in which case the Open Offer will not proceed. If the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement. After Admission of the New Shares, the Underwriting Agreement will not be subject to any condition or right of termination (including in respect of statutory withdrawal rights). A summary of the principal terms of the Underwriting Agreement is set out in paragraph 9.1 of Part X – Additional Information of this document.

No temporary documents of title will be issued in respect of the New Shares held in uncertificated form. Definitive certificates in respect of New Shares taken up are expected to be posted to the Qualifying Shareholders who have validly elected to hold their New Shares in certificated form within 14 days of Admission of the New Shares.

The Existing Shares are already CREST-enabled. No further application for admission to CREST is required for the New Shares and all of the New Shares when issued and fully paid may be held and transferred by means of CREST. In respect of those Qualifying Shareholders who have validly elected to hold their New Shares in uncertificated form, the New Shares are expected to be credited to their CREST stock accounts from 8.00 a.m. on 12 March 2021.

76 Subject to the conditions above being satisfied and save as provided in this Part III, it is expected that:

(a) the Receiving Agent will instruct Euroclear to credit the appropriate stock accounts of Qualifying CREST Shareholders with such Shareholders’ Open Offer Entitlements and Excess Open Offer Entitlements, with effect from 8.00 a.m. on 24 February 2021;

(b) New Shares in uncertificated form will be credited to the appropriate stock accounts of relevant Qualifying CREST Shareholders who validly take up their Open Offer Entitlements and Excess Open Offer Entitlements from 8.00 a.m. on 12 March 2021; and

(c) share certificates for the New Shares will be despatched within 14 days of Admission of the New Shares to relevant Qualifying Non-CREST Shareholders who validly take up their Open Offer Entitlements and Excess Open Offer Entitlements. Such certificates will be despatched at the risk of such Shareholders.

All Qualifying Shareholders taking up their Open Offer Entitlements and Excess Open Offer Entitlements will be deemed to have given the representations and warranties set out in paragraph 9.1 of this Part III (in the case of Qualifying Non-CREST Shareholders) and paragraph 9.2 of this Part III (in the case of Qualifying CREST Shareholders) unless, in each case, such requirement is waived in writing by the Company.

All documents and cheques posted to or by Qualifying Shareholders and/or their transferees (or their agents, as appropriate) will be posted at their own risk.

References to dates and times in this document should be read as subject to adjustment. The Company will make an appropriate announcement to a Regulatory Information Service giving details of any revised dates or times.

3. Action to be taken in connection with the Open Offer

If you are in any doubt about the contents of this document and any accompanying documents or the action you should take, you are recommended to seek immediately your own financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser, who is authorised under the FSMA if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser.

The action to be taken in respect of the Open Offer depends on whether, at the relevant time, a Qualifying Shareholder has received an Application Form in respect of his or her entitlement under the Open Offer or has had his Open Offer Entitlements and Excess Open Offer Entitlements credited to his or her CREST stock account.

If you are a Qualifying Non-CREST Shareholder, please refer to paragraph 4 and paragraphs 6 to 12 (inclusive) of this Part III.

If you are a Qualifying CREST Shareholder, please refer to paragraph 5 and paragraphs 6 to 12 (inclusive) of this Part III, and to the CREST Manual for further information on the CREST procedures referred to above.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors, as only their CREST sponsors will be able to take the necessary actions specified below to apply under the Open Offer in respect of the Open Offer Entitlements and Excess Open Offer Entitlements of such members held in CREST. CREST members who wish to apply under the Open Offer in respect of their Open Offer Entitlements and Excess Open Offer Entitlements in CREST should refer to the CREST Manual for further information on the CREST procedures referred to above.

4. Action to be taken in relation to Open Offer Entitlements and Excess Open Offer Entitlements Represented by Application Forms 4.1 General

Save as provided in paragraph 9.1 of this Part III, Qualifying Non-CREST Shareholders will have received an Application Form with this document.

77 The Application Form sets out:

(a) in Box 1, the number of Existing Shares registered in such person’s name at the Record Date (on which a Qualifying Non-CREST Shareholder’s entitlement to New Shares is based);

(b) in Box 2, the maximum number of New Shares for which such persons are entitled to apply under the Open Offer, taking into account that any fractional entitlements to New Shares will be rounded down in calculating entitlements, such fractional entitlements will not be allotted to Shareholders but will be discarded;

(c) in Box 3, how much they would need to pay in pounds sterling if they wish to take up their Open Offer Entitlements in full;

(d) in Box 4, the maximum number of Excess Shares which such person may apply for;

(e) the procedures to be followed if a Qualifying Non-CREST Shareholder wishes to convert all or part of his or her entitlement into uncertificated form; and

(f) instructions regarding acceptance and payment, consolidation and splitting.

Qualifying Non-CREST Shareholders may apply for less than their maximum Open Offer Entitlements should they wish to do so.

Subject to applying to take up their Open Offer Entitlement in full, Qualifying Non-CREST Shareholders may also apply for any Excess Shares (i.e. New Shares in excess of their Open Offer Entitlements which have not been applied for by other Qualifying Shareholders pursuant to their Open Offer Entitlements) pursuant to the Excess Application Facility.

Qualifying Non-CREST Shareholders may also hold such an Application Form by virtue of a bona fide market claim.

The instructions and other terms set out in the Application Form constitute part of the terms and conditions of the Open Offer to Qualifying Non-CREST Shareholders.

The latest time and date for acceptance of the Application Form and payment in full will be 11.00 a.m. on 10 March 2021. The New Shares are expected to be issued on 12 March 2021. After such date, the New Shares will be in registered form, freely transferable by written instrument of transfer in the usual common form, or if they have been issued in or converted into uncertificated form, in electronic form under the CREST system.

Qualifying Shareholders who do not want to take up or apply for the New Shares under the Open Offer should take no action and should not complete or return the Application Form. Qualifying Shareholders are, however, encouraged to vote at the General Meeting by submitting a proxy electronically by accessing the Registrar’s website at www.sharevote.co.uk, returning the Form of Proxy in accordance with the instructions printed on it or by completing and transmitting a CREST Proxy Instruction. Qualifying Shareholders may contact Equiniti to request a hard copy Form of Proxy.

4.2 Bona fide market claims

Applications to acquire New Shares may only be made on the Application Form and may only be made by the Qualifying Non-CREST Shareholder named in it or by a person entitled by virtue of a bona fide market claim in relation to a purchase of Shares through the market prior to 8.00 a.m. on 22 February 2021 (the date upon which the Shares were marked ‘ex’ the entitlement to participate in the Open Offer). Application Forms may not be assigned, transferred or split, except to satisfy bona fide market claims prior to 3.00 p.m. on 8 March 2021.

The Application Form is not a negotiable document and cannot be separately traded. A Qualifying Non- CREST Shareholder who has sold or otherwise transferred all or part of his, or its holding of Shares prior to the date upon which the Shares were marked ‘ex’ the entitlement to participate in the Open Offer, being 8.00 a.m. on 22 February 2021, should consult his or her broker or other professional adviser as soon as possible, as the invitation to acquire New Shares under the Open Offer may be a benefit which may be claimed by the transferee.

78 Qualifying Non-CREST Shareholders who have sold all of their registered holdings prior to 8.00 a.m. on 22 February 2021 should, if the market claim is to be settled outside CREST, complete Box 9 on the Application Form and immediately send it to the broker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee, or directly to the purchaser or transferee, if known. The Application Form should not, however, be forwarded to or transmitted in or into any Excluded Territory, including the United States. If the market claim is to be settled outside CREST, the beneficiary of the claim should follow the procedures set out in the accompanying Application Form. If the market claim is to be settled in CREST, the beneficiary of the claim should follow the procedures set out in paragraph 5 of this Part III.

Qualifying Non-CREST Shareholders who have sold or otherwise transferred only part of their Existing Shares shown on Box 1 of their Application Form prior to 8.00 a.m. on 22 February 2021 should, if the market claim is to be settled outside CREST, complete Box 9 of the Application Form and immediately deliver the Application Form, together with a letter stating the number of Application Forms required (being one for the Qualifying Non-CREST Shareholder in question and one for each of the purchasers or transferees), the total number of Existing Shares to be included in each Application Form (the aggregate of which must equal the number shown in Box 1 of the original Application Form) and the total number of Open Offer Entitlements to be included in each Application Form (the aggregate of which must equal the number shown in Box 2), to the broker, bank or other agent through whom the sale or transfer was effected or return it by post to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received by no later than 3.00 p.m. on 8 March 2021. The Receiving Agent will then create new Application Forms, mark the Application Forms “Declaration of sale or transfer duly made” and send them by post to the person submitting the original Application Form for appropriate distribution. The Application Form should not, however, be forwarded to or transmitted in or into any Excluded Territory, including the United States.

4.3 Application procedures

Qualifying Non-CREST Shareholders who wish to apply to take up all or any of the New Shares in respect of their Open Offer Entitlements or any Excess Shares pursuant to the Excess Application Facility must complete, sign and return the Application Form in accordance with the instructions thereon. Completed Application Forms should be posted in the accompanying pre-paid envelope (in the UK only) or returned by post to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received by no later than 11.00 a.m. on 10 March 2021, after which time, subject to the limited exceptions set out below, Application Forms will not be valid. Qualifying Non-CREST Shareholders should note that applications, once made, will, subject to the very limited withdrawal rights set out in this document, be irrevocable and receipt thereof will not be acknowledged. If an Application Form is being sent by first-class post in the United Kingdom, Qualifying Shareholders are recommended to allow at least four working days for delivery. Multiple applications will not be accepted.

Completed Application Forms should be returned together with payment in accordance with paragraph 4.4 of this Part III.

4.4 Payment

All payments must be made by cheque or banker’s draft in pounds sterling payable to “Equiniti Ltd re: Mitchells & Butlers Open Offer” and crossed “A/C payee only”. Cheques must be for the full amount payable on acceptance and sent by post to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA so as to be received as soon as possible and, in any event, not later than 11.00 a.m. on 10 March 2021. A pre-paid envelope for use within the United Kingdom only will be sent with the Application Form. If an Application Form is being sent by first-class post in the United Kingdom, Qualifying Non-CREST Shareholders are recommended to allow at least four working days for delivery.

Third party cheques may not be accepted except building society cheques or banker’s drafts which either have the building society or bank branch stamp or are provided with a supporting letter confirming the source of funds. The account name should be the same as that shown on the Application Form. Where the building society or bank has confirmed the relevant Qualifying Shareholder has title to the underlying funds cheques or banker’s drafts must be drawn on an account at a bank or building society or a branch of a bank or building society which must be in the United Kingdom, the Channel Islands or the Isle of Man and which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques or banker’s drafts to be cleared through the facilities provided by

79 either of those companies. Cheques and banker’s drafts must bear the appropriate sorting code number in the top right-hand corner.

Post-dated cheques will not be accepted. Payments via CHAPS, BACS or electronic transfer will not be accepted.

The Company reserves the right to have cheques and banker’s drafts presented for payment on receipt. No interest will be allowed on payments made before they are due and any interest on such payments will be paid to the Company. It is a term of the Open Offer that cheques must be honoured on first presentation and the Company may elect to treat as invalid any acceptances in respect of which cheques are not honoured. Return of the Application Form with a cheque will constitute a warranty that the cheque will be honoured on first presentation.

If cheques or banker’s drafts are presented for payment before the conditions of the Open Offer are fulfilled, the application monies will be kept in an interest-bearing account retained for the Company until all conditions are met. If the Open Offer does not become unconditional, no New Shares will be issued and all monies will be returned (at the applicant’s sole risk), without payment of interest, to applicants as soon as practicable, following the lapse of the Open Offer. The interest earned on such monies, if any, will be retained for the benefit of the Company.

If New Shares are allotted to a Qualifying Shareholder and a cheque for that allotment is subsequently not honoured, the Company may (in its absolute discretion as to manner, timing and terms) make arrangements for the sale of such shares on behalf of such Qualifying Shareholder and hold the proceeds of sale (net of the Company’s reasonable estimate of any loss that it has suffered as a result of the acceptance being treated as invalid and of the expenses of sale including, without limitation, any stamp duty or SDRT payable on the transfer of such shares, and of all amounts payable by such Qualifying Shareholder pursuant to the provisions of this Part III in respect of the acquisition of such shares) on behalf of such Qualifying Shareholder. Neither the Company nor any other person will be responsible for, or have any liability for, any loss, expenses or damage suffered by any Qualifying Shareholder as a result.

All enquires in connection with the Application Forms should be addressed to Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

4.5 Excess Application Facility

Qualifying Non-CREST Shareholders who take up their Open Offer Entitlements in full may apply to subscribe for Excess Shares using the Excess Application Facility, which enables Qualifying Non-CREST Shareholders to apply for New Shares in excess of their Open Offer Entitlements which have not been applied for by other Qualifying Shareholders pursuant to their Open Offer Entitlements.

Applications for Excess Shares will be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements. The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. All applications under the Excess Application Facility will be subject to the Excess Application Cap which has been set at a level that ensures that the Odyzean Group’s commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch. If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by the Excess Allocation Method. Further details regarding the Excess Allocation Method are set out in paragraph 2 of this Part III – Terms and Conditions of the Open Offer.

Qualifying Non-CREST Shareholders who wish to apply for New Shares in excess of their Open Offer Entitlement must complete the Application Form in accordance with instructions set out on the Application Form.

80 Qualifying Non-CREST Shareholders who make applications for Excess Shares under the Excess Application Facility which are not met in full and from whom payment in full has been made will receive a pounds sterling amount equal to the number of New Shares applied and paid for, but not allocated to, the relevant Qualifying Non-CREST Shareholder, multiplied by the Offer Price. Monies will be returned, (at the applicant’s risk) without interest either as a cheque by first class post to the address set out on the Application Form or returned direct to the account of the bank or building society on which the relevant cheque or banker’s draft was drawn as soon as practicable but not later than 10 Business Days from the announcement of the results of the Open Offer.

Fractions of Excess Shares will not be issued under the Excess Application Facility and fractions of Excess Shares will be rounded down to the nearest whole number.

All enquiries in connection with the procedure for application under the Excess Application Facility and Excess Open Offer Entitlements should be addressed to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Equiniti can be contacted on Equiniti on 0333 207 6535 (or +44 333 207 6535, if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. to 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

CREST members who wish to apply for some or all of their entitlements to New Shares should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member you should consult your CREST sponsor if you wish to apply for New Shares as only your CREST sponsor will be able to take the necessary action to make this application in CREST.

4.6 Discretion as to validity of acceptances

If payment is not received in full by 11.00 a.m. on 10 March 2021, the offer to apply for New Shares will (unless the Company has exercised its right to treat as valid an acceptance, as set out below) be deemed to have been declined and will lapse. The Company may elect, but will not be obliged, to treat as valid Application Forms and accompany remittances for the full amount due which are received prior to 2.00 p.m. on 10 March 2021.

The Company may elect, but will not be obliged, to treat as a valid acceptance the receipt of appropriate remittance by 2.00 p.m. on 10 March 2021 from an authorised person (as defined in section 31(2) of FSMA) specifying the number of New Shares to be acquired and containing an undertaking by that person to lodge the relevant Application Form, duly completed, in due course.

The Company may also (in its sole discretion) treat an Application Form as valid and binding on the person(s) by whom or on whose behalf it is lodged even if it is not completed in accordance with the relevant instructions or is not accompanied by a valid power of attorney where required.

The Company reserves the right to treat as invalid any application or purported application for New Shares pursuant to the Open Offer that appears to the Company to have been executed in, despatched from, or that provides an address for delivery of definitive share certificates for New Shares in the United States, any other Excluded Territory or any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law unless the Company is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction.

The provisions of this paragraph 4.6 and any other terms of the Open Offer relating to Qualifying Non- CREST Shareholders may be waived, varied or modified as regards specific Qualifying Non- CREST Shareholder(s) or on a general basis by the Company.

4.7 Effect of application

All documents and remittances sent by post by or to an applicant (or as the applicant may direct) will be sent at the applicant’s own risk. By completing and delivering an Application Form the applicant:

81 and to execute, deliver and exercise his or her rights, and perform his or her obligations, under any contracts resulting therefrom and that he or she is not a person otherwise prevented by legal or regulatory restrictions from applying for New Shares or acting on behalf of any such person on a non- discretionary basis;

(b) agrees with each of the Company and the Underwriters that all applications under the Open Offer and any contractual or non-contractual obligations resulting therefrom will be governed by, and construed in accordance with, the laws of England;

(c) confirms to each of the Company and the Underwriters that in making the application he or she is not relying on any information or representation other than that contained in this document or any documents incorporated by reference into this document, and the applicant accordingly agrees that no person responsible solely or jointly for this document (including any documents incorporated by reference into this document) or any part thereof, or involved in the preparation thereof, will have any liability for any information or representation not so contained and further agrees that, having had the opportunity to read this document, including any documents incorporated by reference, he or she will be deemed to have had notice of all information contained in this document (including information incorporated by reference);

(d) confirms that in making the application he or she is not relying and has not relied on the Underwriters or any other person affiliated with the Underwriters in connection with any investigation of the accuracy of any information contained in this document or his or her investment decision;

(e) represents and warrants to each of the Company and the Underwriters that if he or she has received some or all of his or her Open Offer Entitlements or Excess Open Offer Entitlements from a person other than the Company, he or she is entitled to apply under the Open Offer in relation to such Open Offer Entitlements or Excess Open Offer Entitlements by virtue of a bona fide market claim;

(f) represents and warrants to each of the Company and the Underwriters that he or she is the Qualifying Shareholder originally entitled to the Open Offer Entitlements and Excess Open Offer Entitlements or that he or she received such Open Offer Entitlements and Excess Open Offer Entitlements by virtue of a bona fide market claim;

(g) represents and warrants to each of the Company and the Underwriters that: (i) either he or she is not, nor is he or she applying on behalf of any person who is located, a citizen or resident, or a corporation, partnership or other entity created or organised in or under any laws, in or of any Excluded Territory or any jurisdiction in which the application for New Shares is prevented by law, or he or she is a person in the Republic of Ireland that has received this document direct from the Company (in which case he or she can assume the Company has determined that he or she is specifically permitted to access this document and apply for New Shares under the Open Offer); and (ii) he or she is not applying with a view to re-offering, reselling, transferring or delivering any of the New Shares which are the subject of his or her application to, or for the benefit of, a person who is located, a citizen or resident, or which is a corporation, partnership or other entity created or organised in or under any laws, in or of any Excluded Territory or any jurisdiction in which the application for New Shares is prevented by law, nor acting on behalf of any such person on a non-discretionary basis nor a person(s) otherwise prevented by legal or regulatory restrictions from applying for New Shares under the Open Offer;

(h) represents and warrants to each of the Company and the Underwriters that he or she is not, and nor is he or she applying as nominee or agent for, a person whose business is or includes issuing depositary receipts and/or the provision of clearance services as referenced in sections 67, 70, 93 and/or 96 of the Finance Act 1986 (a Specified Person) and that if any stamp duty, stamp duty reserve tax, or any other transfer or issue tax or related interest and penalties (Stamp Tax) arises in connection with his or her acquisition of the New Shares (including any rights in respect thereof or any acquisition by his or her agent or nominee) or any subsequent transfer by him or her, or his or her agent, of such shares or rights to a Specified Person or a nominee or agent for such person, he or she agrees that he or she will pay and bear, or procure the payment of, the cost of such Stamp Tax;

(i) undertakes to each of the Company and the Underwriters that the person he or she specifies for registration as the holder of any New Shares will be himself or herself or his or her nominee and

82 agrees that the Company will not be liable for any Stamp Tax arising from any failure to observe this undertaking and will indemnify the Company on an after-tax basis for any such Stamp Tax;

(j) acknowledges that he or she will be liable for any non-United Kingdom Stamp Tax in connection with his or her acquisition of New Shares and any subsequent dealing in relation to them; and

(k) requests that the New Shares to which he or she will become entitled be issued to him or her it on the terms set out in this document and the Application Form, subject to the Articles.

4.8 Money Laundering Regulations

It is a term of the Open Offer that, to ensure compliance with the Money Laundering Regulations, the Receiving Agent, Equiniti, may require, at its absolute discretion, verification of the identity of the beneficial owner by whom or on whose behalf the Application Form is lodged with payment (which requirements are referred to below as the “verification of identity requirements”). If an application is made by a United Kingdom regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Regulations, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Receiving Agent. In such case, the lodging agent’s stamp should be inserted on the Application Form.

The person lodging the Application Form with payment (the acceptor), including any person who appears to the Receiving Agent to be acting on behalf of some other person, will thereby be deemed to agree to provide the Receiving Agent and/or the Company with such information and other evidence as either of them may require to satisfy the verification of identity requirements. Submission of an Application Form will constitute a warranty to the Company and the Underwriters that the Money Laundering Regulations will not be breached by the acceptance of remittance and an undertaking by the acceptor to provide promptly to the Receiving Agent such information as may be specified by the Receiving Agent as being required for the purpose of the Money Laundering Regulations and agree for the Receiving Agent to make a search using a credit reference agency for the purposes of confirming such identity; where deemed necessary a record of the search will be retained.

If Equiniti determines that the verification of identity requirements apply to any acceptor or application, the relevant New Shares (notwithstanding any other term of the Open Offer) will not be issued to the relevant acceptor unless and until the verification of identity requirements have been satisfied in respect of that acceptor or application. Equiniti is entitled, and with the prior written consent of the Underwriters, to determine whether the verification of identity requirements apply to any acceptor or application and whether such requirements have been satisfied, and none of Equiniti, the Company or the Underwriters will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays and potential rejection of an application. If, within a reasonable period of time following a request for verification of identity, Equiniti has not received evidence satisfactory to it as aforesaid, the Company may, in its absolute discretion, treat the relevant application as invalid, in which event the application monies will be returned (at the applicants’ risk) without interest either as a cheque by first class post to the address set out on the Application Form or returned direct to the account of the bank or building society on which the relevant cheque or banker’s draft was drawn as soon as practicable.

The verification of identity requirements will not usually apply if:

(a) the acceptor is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations;

(b) the acceptor is an organisation required to comply with the EU Money Laundering Directive 2015/849, as amended;

(c) the acceptor is a company whose securities are listed on a regulated market subject to specified disclosure obligations;

(d) the acceptor (not being an acceptor who delivers his/her application in person) makes payment through an account in the name of such acceptor with a credit institution which is subject to the Money

83 Laundering Regulations or with a credit institution situated in a non-EEA State which imposes requirements equivalent to those laid down in that directive; or

(e) the aggregate subscription price for the relevant New Shares is less than €15,000 (or its pounds sterling equivalent).

Where the verification of identity requirements apply, please note the following as this will assist in satisfying the requirements. Satisfaction of these requirements may be facilitated in the following ways:

(i) if payment is made by cheque or banker’s draft drawn on a branch of a bank or building society in the United Kingdom and bears a UK bank sort code number in the top right-hand corner, the following applies. Cheques, which are recommended to be drawn on the personal account of the individual investor where they have sole or joint title to the funds, should be made payable to “Equiniti Ltd re: Mitchells & Butlers Open Offer” and crossed “A/C payee only”. Third party cheques may not be accepted except for building society cheques or banker’s drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the building society cheque/banker’s draft to such effect or providing a supporting letter confirming the source of funds. The account name should be the same as shown on the Application Form; or

(ii) if the Application Form is lodged with payment by an agent which is an organisation of the kind referred to in sub-paragraph (b) above or which is subject to anti-money laundering regulations in a country which is a member of the Financial Action Task Force (the non-EU members of which are Argentina, Australia, Brazil, Canada, China, members of the Gulf Co- operation Council (being Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), Hong Kong, Iceland, India, Israel, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Norway, the Russian Federation, Saudi Arabia, Singapore, South Africa, Switzerland, Turkey, the United Kingdom and the United States), the agent should provide written confirmation that it has that status with the Application Form(s) and written assurances that it has obtained and recorded evidence of the identity of the person for whom it acts and that it will on demand make such evidence available to the Receiving Agent or the relevant authority.

In order to confirm the acceptability of any written assurance referred to in sub-paragraph (ii) above, or in any other case, the acceptor should contact Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m.–5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

4.9 Issue of New Shares in certificated form

Definitive share certificates in respect of the New Shares to be held in certificated form are expected to be despatched within 14 days of Admission of the New Shares, at the risk of the person(s) entitled to them, to accepting Qualifying Non-CREST Shareholders or their agents or, in the case of joint holdings, to the first- named Shareholder, in each case at their registered address (unless lodging agent details have been completed on the Application Form).

5. Action to be taken in relation to Open Offer Entitlements and Excess Open Offer Entitlements credited in CREST 5.1 General

Each Qualifying CREST Shareholder is expected to receive a credit to his or her CREST stock account of his or her Open Offer Entitlements equal to the maximum number of New Shares for which he or she is entitled to apply to acquire under the Open Offer as well as a credit in respect of his or her Excess Open Offer Entitlements. Any fractional entitlements to New Shares will be rounded down in calculating entitlements to New Shares and such fractional entitlements will not be allotted to Shareholders and will be discarded.

84 The CREST stock account to be credited will be an account under the participant ID and member account ID that apply to the Shares held at the Record Date by the Qualifying CREST Shareholder in respect of which the Open Offer Entitlements and Excess Open Offer Entitlements have been allocated.

If for any reason it is impracticable to credit the stock accounts of Qualifying CREST Shareholders by 3.00 p.m. on 24 2021 or such later time as the Company will decide, Application Forms will, unless the Company agrees otherwise, be sent out in substitution for the Open Offer Entitlements and Excess Open Offer Entitlements which have not been so credited and the expected timetable as set out in this document may, with the consent of the Underwriters, be adjusted as appropriate. References to dates and times in this document should be read as subject to any such adjustment. The Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates but Qualifying CREST Shareholders may not receive any further written communication.

Qualifying CREST Shareholders who wish to take up all or part of their entitlements in respect of New Shares should refer to the CREST Manual for further information on the CREST procedures referred to below. If you are a CREST sponsored member, you should consult your CREST sponsor if you wish to take up your entitlement, as only your CREST sponsor will be able to take the necessary action to take up your entitlements in respect of New Shares. If you have any queries on the procedure for acceptances and payment, you should call Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

In accordance with the instructions in this Part III, the CREST instruction must have been settled by 11.00 a.m. on 10 March 2021.

5.2 Bona fide market claims

The Open Offer Entitlements and Excess Open Offer Entitlements will constitute a separate security for the purposes of CREST and will have a separate ISIN. Although Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of Open Offer Entitlements and Excess Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim transaction. Transactions identified by the CREST Claims Processing Unit as “cum” the Open Offer Entitlement will generate an appropriate market claim transaction and the relevant Open Offer Entitlement(s) will thereafter be transferred accordingly. Please note that automated CREST generated claims and buyer protection will not be offered on the Excess Open Offer Entitlements.

5.3 Excess Application Facility

Qualifying CREST Shareholders who take up their Open Offer Entitlements in full may apply to subscribe for Excess Shares using the Excess Application Facility, which enables Qualifying CREST Shareholders to apply for New Shares in excess of their Open Offer Entitlement.

Applications for Excess Shares will be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements. The Odyzean Group has committed to subscribe for any Excess Shares that are made available and allocated to it under the Excess Application Facility. All applications under the Excess Application Facility will be subject to the Excess Application Cap which has been set at a level that ensures that the Odyzean Group's commitment to subscribe for its Open Offer Entitlements in full and for Excess Shares up to the level of its Excess Application Cap results in the Open Offer being fully subscribed from launch. If there is an over subscription resulting from excess applications, allocations of Excess Shares will be determined by the Excess Allocation Method. Further details regarding the Excess Allocation Method are set out in paragraph 2 of this Part III – Terms and Conditions of the Open Offer.

All enquiries in connection with the procedure for application for Excess Open Offer Entitlements should be made to Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be

85 charged at the applicable international rate. The helpline is open between 8.30 a.m.– 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

An Excess Open Offer Entitlement in CREST may not be sold or otherwise transferred. Save as provided in this Part III in relation to certain Overseas Shareholders, the CREST accounts of Qualifying CREST Shareholders will be credited with an Excess Open Offer Entitlement in order for any applications for Excess Shares to be settled through CREST. The credit of such Excess Open Offer Entitlement does not in any way give Qualifying CREST Shareholders a right to the New Shares attributable to the Excess Open Offer Entitlement as an Excess Open Offer Entitlement is subject to scaling back in accordance with the Excess Allocation Method and the terms of this document.

To apply for Excess Shares pursuant to the Open Offer, Qualifying CREST Shareholders should follow the instructions above and must not return a paper form and cheque. Excess Open Offer Entitlements will not be subject to Euroclear’s market claims process. CREST Shareholders claiming Excess Open Offer Entitlements by virtue of a bona fide market claim are advised to contact Equiniti to request a credit of the appropriate number of entitlements to their CREST account.

Should a transaction be identified by the CREST Claims Processing Unit as “cum” the Open Offer Entitlement and the relevant Open Offer Entitlement(s) be transferred, the Excess Open Offer Entitlement(s) will not transfer with the Open Offer Entitlement(s) claim, but will need to be claimed separately by the purchaser who is advised to contact Equiniti to request a credit of the appropriate number of Excess Open Offer Entitlements to their CREST account. Please note that a separate USE Instruction must be sent in respect of any application under the Excess Open Offer Entitlement.

A Qualifying CREST Shareholder who has made a valid application for Excess Shares under the Excess Application Facility which is not met in full, and from whom payment in full for Excess Shares has been received, will receive a pounds sterling amount equal to the number of Excess Shares applied and paid for, but not allocated to, the relevant Qualifying CREST Shareholder, multiplied by the Offer Price. Monies will be returned within CREST to the originating account by not later than four Business Days from the announcement of the results of the Open Offer, without payment of interest and at the applicant’s sole risk.

Fractions of Excess Shares will not be issued under the Excess Application Facility and fractions of Excess Shares will be rounded down to the nearest whole number.

5.4 USE Instructions for some or all of the Open Offer Entitlements

Qualifying CREST Shareholders who are CREST members and who wish to apply for New Shares in respect of all or some of their Open Offer Entitlements in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) a USE Instruction to CREST which, on its settlement, will have the following effect:

(a) the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with a number of Open Offer Entitlements corresponding to the number of New Shares applied for; and

(b) the creation of a CREST payment, in accordance with the CREST payment arrangements, in favour of the payment bank of the Receiving Agent in respect of the amount specified in the USE Instruction which must be the full amount payable on application for the number of New Shares referred to in sub-paragraph (a) above.

5.5 Content of USE Instructions in respect of Open Offer Entitlements

The USE Instruction must be properly authenticated in accordance with Euroclear’s specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

(a) the number of New Shares for which application is being made (and hence the number of the Open Offer Entitlement(s) being delivered to the Receiving Agent);

(b) the ISIN of the Open Offer Entitlements. This is GB00BLH1P296;

86 (d) the CREST member account ID of the CREST member from which the Open Offer Entitlements are to be debited;

(e) the participant ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 2RA05;

(f) the member account ID of the Receiving Agent in its capacity as a CREST receiving agent. This is RA348401;

(g) the amount payable by means of a CREST payment on settlement of the USE Instruction. This must be the full amount payable on application for the number of New Shares referred to in sub- paragraph (a) above;

(h) the intended settlement date. This must be on or before 11.00 a.m. on 10 March 2021;

(i) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST;

(j) a contact name and telephone number (in the free format shared note field); and

(k) a priority of at least 80.

In order for an application under the Open Offer to be valid, the USE Instruction must comply with the requirements as to authentication and contents set out above and must settle on or before 11.00 a.m. on 10 March 2021. CREST members and, in the case of CREST sponsored members, their CREST sponsors, should note that the last time at which a USE Instruction may settle on 10 March 2021 in order to be valid is 11.00 a.m. on that day.

If Admission of the New Shares has not occurred by 8.00 a.m. on 12 March 2021, or such later time and date as the Company and the Global Co-ordinator may agree, being not later than 31 March 2021, the Underwriters may terminate the Underwriting Agreement. In such circumstances, the Open Offer will not proceed, the Open Offer Entitlements admitted to CREST will be disabled and the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as soon as practicable thereafter. The interest earned on such monies, if any, will be retained for the benefit of the Company.

5.6 USE Instructions for the Excess Open Offer Entitlements

Qualifying CREST Shareholders who are CREST members and who wish to apply for Excess Shares in respect of their Excess Open Offer Entitlements in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) a USE Instruction to CREST which, on its settlement, will have the following effect:

(a) the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with a number of Excess Open Offer Entitlements corresponding to the number of Excess Shares applied for; and

5.7 Content of USE Instructions in respect of Excess Open Offer Entitlements

(a) the number of Excess Shares for which application is being made (and hence the number of the Excess Open Offer Entitlement(s) being delivered to the Receiving Agent);

(b) the ISIN of the Excess Open Offer Entitlements. This is GB00BLH1P304;

87 (d) the CREST member account ID of the CREST member from which the Excess Open Offer Entitlements are to be debited;

(e) the participant ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 2RA19;

(f) the member account ID of the Receiving Agent in its capacity as a CREST receiving agent. This is RA348402;

(g) the amount payable by means of a CREST payment on settlement of the USE Instruction. This must be the full amount payable on application for the number of Excess Shares referred to in sub- paragraph (a) above;

(h) the intended settlement date. This must be on or before 11.00 a.m. on 10 March 2021;

(i) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST;

(j) a contact name and telephone number (in the free format shared note field); and

(k) a priority of at least 80.

If Admission of the New Shares has not occurred by 8.00 a.m. on 12 March 2021, or such later time and date as the Company and the Global Co-ordinator may agree, being not later than 31 March 2021, the Underwriters may terminate the Underwriting Agreement. In such circumstances, the Open Offer will not proceed, the Excess Open Offer Entitlements admitted to CREST will be disabled and the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as soon as practicable thereafter. The interest earned on such monies, if any, will be retained for the benefit of the Company.

5.8 CREST procedures and timings

Qualifying CREST Shareholders who are CREST members and CREST sponsors (on behalf of CREST sponsored members) should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in relation to the input of a USE Instruction and its settlement in connection with the Open Offer. It is the responsibility of the Qualifying CREST Shareholder concerned to take (or, if the Qualifying CREST Shareholder is a CREST sponsored member, to procure that his CREST sponsor takes) the action necessary to ensure that a valid acceptance is received as stated above by 11.00 a.m. on 10 March 2021. Qualifying CREST Shareholders and (where applicable) CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

5.9 Validity of application

A USE Instruction complying with the requirements as to authentication and contents set out above which settles by not later by 11.00 a.m. on 10 March 2021 will constitute a valid application under the Open Offer.

5.10 Incorrect or incomplete applications

If a USE Instruction includes a CREST payment for an incorrect sum, the Company, through the Receiving Agent, reserves the right:

(a) to reject the application in full and refund the payment to the CREST member in question (without interest);

88 (b) in the case that an insufficient sum is paid, to treat the application as a valid application for such lesser whole number of New Shares as would be able to be applied for with that payment at the Offer Price, refunding any unutilised sum to the CREST member in question (without interest); or

(c) in the case that an excess sum is paid, to treat the application as a valid application for all the New Shares referred to in the USE Instruction, refunding any unutilised sum to the CREST member in question (without interest).

5.11 Effect of application

A CREST member who makes or is treated as making a valid application in accordance with the above procedures thereby:

(a) represents and warrants to each of the Company and the Underwriters that he or she has the right, power and authority, and has taken all action necessary, to make the application under the Open Offer and to execute, deliver and exercise his or her rights, and perform his or her obligations, under any contracts resulting therefrom and that he or she is not a person otherwise prevented by legal or regulatory restrictions from applying for New Shares or acting on behalf of any such person on a non- discretionary basis;

(b) agrees with each of the Company and the Underwriters to pay the amount payable on application in accordance with the above procedures by means of a CREST payment in accordance with the CREST payment arrangements (it being acknowledged that the payment to the Receiving Agent’s payment bank in accordance with the CREST payment arrangements will, to the extent of the payment, discharge in full the obligation of the CREST member to pay the amount payable on application);

(c) agrees with each of the Company and the Underwriters that all applications under the Open Offer and any contractual or non-contractual obligations resulting therefrom, will be governed by, and construed in accordance with, the laws of England;

(e) confirms to each of the Company and the Underwriters that in making the application he or she is not relying on any information or representation other than that contained in this document, or any documents incorporated by reference into this document, and the applicant accordingly agrees that no person responsible solely or jointly for this document (including any documents incorporated by reference into this document) or any part thereof, or involved in the preparation thereof, will have any liability for any information or representation not so contained and further agrees that, having had the opportunity to read this document, including any documentation incorporated by reference, he or she will be deemed to have had notice of all the information contained in this document (including information incorporated by reference);

(f) represents and warrants to each of the Company and the Underwriters that if he or she has received some or all of his or her Open Offer Entitlements and Excess Open Offer Entitlements from a person other than the Company, he or she is entitled to apply under the Open Offer in relation to such Open Offer Entitlements and Excess Open Offer Entitlements by virtue of a bona fide market claim;

(g) represents and warrants to each of the Company and the Underwriters that he or she is the Qualifying Shareholder originally entitled to the Open Offer Entitlements and Excess Open Offer Entitlements or that he or she has received such Open Offer Entitlements and Excess Open Offer Entitlements by virtue of a bona fide market claim;

(h) represents and warrants to each of the Company and the Underwriters that: (a) either he or she is not, nor is he or she applying on behalf of any person who is located, a citizen or resident, or a corporation, partnership or other entity created or organised in or under any laws, in or of any Excluded Territory or any jurisdiction in which the application for New Shares is prevented by law, or he or she is a person in the Republic of Ireland that has received this document direct from the Company (in which case he or she can assume the Company has determined that he or she is specifically permitted to access this document and apply for New Shares under the Open Offer); and

89 (b) he or she is not applying with a view to re-offering, reselling, transferring or delivering any of the New Shares which are the subject of his or her application to, or for the benefit of, a person who is located, a citizen or resident or which is a corporation, partnership or other entity created or organised in or under any laws, in or of any Excluded Territory or any jurisdiction in which the application for New Shares is prevented by law, nor acting on behalf of any such person on a non-discretionary basis nor a person(s) otherwise prevented by legal or regulatory restrictions from applying for New Shares under the Open Offer;

(i) requests that the New Shares to which he or she will become entitled be issued to him or her on the terms set out in this document, subject to the Articles; and

(j) represents and warrants to each of the Company and the Underwriters that he or she is not, and nor is he or she applying as nominee or agent for, a person whose business is or includes issuing depositary receipts and/or the provision of clearance services as referenced in sections 67, 70, 93 and/or 96 of the Finance Act 1986 (a Specified Person) and that if any stamp duty, stamp duty reserve tax, or any other transfer or issue tax or related interest and penalties (Stamp Tax) arises in connection with his or her acquisition of the New Shares (including any rights in respect thereof or any acquisition by his or her agent or nominee) or any subsequent transfer by him or her, or his or her agent, of such shares or rights to a Specified Person or a nominee or agent for such person, he or she agrees that he or she will pay and bear, or procure the payment of, the cost of such Stamp Tax;

(k) undertakes to each of the Company and the Underwriters that the person he or she specifies for registration as the holder of any New Shares will be himself or herself or his or her nominee and agrees that the Company will not be liable for any Stamp Tax arising from any failure to observe this undertaking and will indemnify the Company on an after-tax basis for any such Stamp Tax; and

(l) acknowledges that he or she will be liable for any non-United Kingdom Stamp Tax in connection with his or her acquisition of New Shares and any subsequent dealing in relation to them.

5.12 Discretion as to rejection and validity of acceptances

The Company may:

(a) reject any acceptance constituted by a USE Instruction, which is otherwise valid, in the event of a breach of any of the representations, warranties and undertakings set out or referred to in this paragraph 5.12. Where an acceptance is made as described in this paragraph 5.12 which is otherwise valid, and the USE Instruction concerned fails to settle by 11.00 a.m. on 10 March 2021 (or by such later time and date as the Company and the Global Co-ordinator may determine), the Company will be entitled to assume, for the purposes of their right to reject an acceptance as described in this sub- paragraph (a) that there has been a breach of the representations, warranties and undertakings set out or referred to in paragraph 5.11 of this Part III unless the Company is aware of any reason outside the control of the Qualifying CREST Shareholder or CREST sponsor (as appropriate) concerned for the failure of the USE Instruction to settle;

(b) treat as valid (and binding on the Qualifying CREST Shareholder concerned) an acceptance which does not comply in all respects with the requirements as to validity set out or referred to in this paragraph 5.12;

(c) accept an alternative properly authenticated dematerialised instruction from a Qualifying CREST Shareholder or (where applicable) a CREST sponsor as constituting a valid acceptance in substitution for, or in addition to, a USE Instruction and subject to such further terms and conditions as the Company may determine;

(d) treat a properly authenticated dematerialised instruction (in this sub-paragraph (d), the “first instruction”) as not constituting a valid acceptance if, at the time at which Equiniti receives a properly authenticated dematerialised instruction giving details of the first instruction, either the Company or Equiniti has received actual notice from Euroclear of any of the matters specified in CREST Regulations 35(5)(a) in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and

90 (e) accept an alternative instruction or notification from a Qualifying CREST Shareholder or (where applicable) a CREST sponsor, or extend the time for acceptance and/or settlement of a USE Instruction or any alternative instruction or notification if, for reasons or due to circumstances outside the control of any Qualifying CREST Shareholder or (where applicable) CREST sponsor, a Qualifying CREST Shareholder is unable validly to take up all or part of his Open Offer Entitlement or Excess Open Offer Entitlement by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of facilities and/or systems operated by Equiniti in connection with CREST.

5.13 Money Laundering Regulations

If you hold your Existing Shares in CREST and apply to take up all or part of your entitlement as agent for one or more persons and you are not a United Kingdom or EU regulated person or institution (e.g. a bank, a broker or another United Kingdom financial institution), then, irrespective of the value of the application, the Receiving Agent is entitled to take reasonable measures to establish the identity of the person or persons (or the ultimate controller of such person or persons) on whose behalf you are making the application and any submission of a USE Instruction constitutes agreement for the Receiving Agent to make any search deemed necessary. Such Qualifying CREST Shareholders must therefore contact the Receiving Agent before sending any USE Instruction or other instruction so that appropriate measures may be taken.

Submission of a USE Instruction which constitutes, or which may on its settlement constitute, a valid acceptance as described above is an undertaking by the applicant to the Company and the Underwriters to provide promptly to the Receiving Agent any information the Receiving Agent may specify as being required for the purposes of the Money Laundering Regulations or FSMA. Pending the provision of evidence satisfactory to the Receiving Agent as to identity, the Receiving Agent, having consulted with the Company, may take, or omit to take, such action as it may determine to prevent or delay settlement of the USE Instruction. If satisfactory evidence of identity has not been provided within a reasonable time, then the Receiving Agent will not permit the USE Instruction concerned to proceed to settlement but without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure by the applicant to provide satisfactory evidence.

5.14 Deposit of Open Offer Entitlements into, and withdrawal from, CREST

A Qualifying Non-CREST Shareholder’s entitlement under the Open Offer as shown by the number of Open Offer Entitlements set out in his or her Application Form, including the entitlement to apply under the Excess Application Facility, may be deposited into CREST (either into the account of the Qualifying Shareholder named in the Application Form or into the name of a person entitled by virtue of a bona fide market claim). Similarly, Open Offer Entitlements held in CREST may be withdrawn from CREST so that the entitlement under the Open Offer is reflected in an Application Form. Normal CREST procedures (including timings) apply in relation to any such deposit or withdrawal (these are set out in the Application Form in the case of a deposit into CREST).

A Qualifying Non-CREST Shareholder who wishes to make such a deposit should sign and complete Box 12 of their Application Form, entitled “CREST Deposit Form” and then deposit their Application Form with the CCSS. In addition, the normal CREST stock deposit procedures will need to be carried out, except that (a) it will not be necessary to complete and lodge a separate CREST transfer form (as prescribed under the Stock Transfer Act 1963) with the CCSS and (b) only the Open Offer Entitlement shown in Box 2 of the Application Form may be deposited into CREST. After depositing their Open Offer Entitlement into their CREST account, CREST holders will shortly thereafter receive a credit for their Excess Open Offer Entitlement, which will be managed by Equiniti.

If you have received your Application Form by virtue of a bona fide market claim, the declaration in Box 9 must be made or (in the case of an Application Form which has been split) marked “Declaration of sale or transfer duly made”. If you wish to take up your Open Offer Entitlement, the CREST Deposit Form in Box 12 of your Application Form must be completed and deposited with the CCSS in accordance with the instructions above. A holder of more than one Application Form who wishes to deposit Open Offer Entitlements shown on those Application Forms into CREST must complete Box 12 of each Application Form.

In particular, having regard to normal processing times in CREST and on the part of the Receiving Agent, the recommended latest time for depositing an Application Form with the CCSS, where the person entitled wishes

91 to hold the Open Offer Entitlement set out in such Application Form as an Open Offer Entitlement in CREST and the entitlement to apply under the Excess Application Facility in CREST, is by 3.00 p.m. on 5 March 2021. The recommended latest time for receipt by Euroclear of a dematerialised instruction requesting withdrawal of Open Offer Entitlements from CREST is 4.30 p.m. on 4 March 2021, in either case so as to enable the person acquiring or (as appropriate) holding the Open Offer Entitlements, following the deposit or withdrawal (whether as shown in an Application Form or held in CREST), to take all necessary steps in connection with applying in respect of the Open Offer Entitlements, as the case may be, prior to 11.00 a.m. on 10 March 2021.

Delivery of an Application Form with the CREST deposit form duly completed, whether in respect of a deposit into the account of the Qualifying Shareholder named in the Application Form or into the name of another person, will constitute a representation and warranty to the Company, the Underwriters and Equiniti by the relevant CREST member(s) that it is/they are not in breach of the provisions of the notes under the paragraph headed Application Letter on page three of the Application Form, and a declaration to the Company and the Receiving Agent from the relevant CREST member(s) that it/they is/are not located in, or citizen(s) or resident(s) of, any Excluded Territory or any jurisdiction in which the application for New Shares is prevented by law, and, where such deposit is made by a beneficiary or a market claim, a representation and warranty that the relevant CREST member(s) is/are entitled to apply under the Open Offer by virtue of a bona fide market claim.

5.15 Right to allot and issue New Shares in certificated form

Despite any other provision of this document, the Company reserves the right to allot and to issue any New Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of an interruption, failure or breakdown of CREST (or of any part of CREST) or of a part of the facilities and/or systems operated by Equiniti in connection with CREST.

6. Taxation

Information on taxation with regard to the Open Offer for Qualifying Shareholders who are resident in (and only in) the United Kingdom for United Kingdom tax purposes is set out in Part IX – Taxation. The information contained in Part IX – Taxation is intended only as a general guide to the current tax position in the United Kingdom. Qualifying Shareholders resident in the United Kingdom for United Kingdom tax purposes should consult their own tax advisers regarding the tax treatment of the Open Offer in light of their own circumstances. Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult an appropriately qualified independent professional adviser immediately.

7. Withdrawal rights

Qualifying Shareholders wishing to exercise or direct the exercise of statutory withdrawal rights after the publication by the Company of a prospectus supplementing this document (if any) must do so by lodging a written notice of withdrawal (which will include a notice sent by email to Equiniti) within two Business Days commencing on the Business Day after the date on which the supplementary prospectus is published, which must include the full name and address of the person wishing to exercise statutory withdrawal rights and, if such person is a Qualifying CREST Shareholder, the participant ID and the member account ID of such Qualifying CREST Shareholder. The notice must be sent to the Receiving Agent, Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA United Kingdom by mail so as to be received by the end of the withdrawal period specified above. Notice of withdrawal given by any other means or which is deposited with or received by the Receiving Agent after expiry of such period will not constitute a valid withdrawal. The Company will not permit the exercise of withdrawal rights after payment by the relevant person for the New Shares applied for in full and the allotment of such New Shares to such persons becomes unconditional, save to the extent required by statute. In such event, Shareholders are advised to seek independent legal advice. Shareholders should note that, in any event, withdrawal rights will not apply once Admission of the New Shares has occurred.

Following the valid exercise of statutory withdrawal rights, application monies will be returned by post to the relevant Qualifying Shareholders at their own risk and without interest to the address set out in the Application Form and/or the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as applicable within 14 days of such exercise of statutory withdrawal rights. Interest earned on such monies will be retained for the benefit of the Company. The provisions of this paragraph 7 or this Part III are without prejudice to the statutory rights of Qualifying Shareholders. In such event, Qualifying Shareholders are advised to seek independent legal advice. For further details, Shareholders

92 should call Equiniti on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom). Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.30 a.m. and 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Equiniti cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

8. Overseas Shareholders

This document has been approved by the FCA, being the competent authority in the United Kingdom.

It is the responsibility of any person (including, without limitation, custodians, nominees and trustees) outside the United Kingdom wishing to participate in the Open Offer to satisfy himself, herself or itself as to the full observance of the laws of any relevant territory in connection therewith, including the obtaining of any governmental or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The comments set out in this paragraph 8 are intended as a general guide only and any Overseas Shareholder who is in doubt as to his or her position should consult his or her professional adviser without delay.

8.1 General

The distribution of this document and the Application Form and the making of the Open Offer to persons resident in, or who are citizens of, or who have a registered address in countries other than the United Kingdom may be affected by the law of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to participate in the Open Offer.

This paragraph 8 sets out the restrictions applicable to Shareholders who have registered addresses outside the United Kingdom, who are physically located outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are persons (including, without limitation, custodians, nominees and trustees) who have a contractual or legal obligation to forward this document to a jurisdiction outside the United Kingdom, or who hold Shares for the account or benefit of any such person.

Subject to limited exceptions, Application Forms have not been, and will not be, sent to, and Open Offer Entitlements, Excess Open Offer Entitlements and New Shares will not be credited to CREST accounts of, persons in the Excluded Territories, or to their agent or intermediary.

No person receiving a copy of this document and/or an Application Form and/or any other document issued by the Company in connection with the Open Offer and/or receiving a credit of Open Offer Entitlements or Excess Open Offer Entitlements to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him or her, nor should he or she in any event use the Application Form or deal with Open Offer Entitlements or Excess Open Offer Entitlements in CREST unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to him and the Application Form or Open Offer Entitlements or Excess Open Offer Entitlements in CREST could lawfully be used or dealt with without contravention of any unfulfilled registration or other legal or regulatory requirements. In such circumstances, where an invitation or offer would contravene any registration or other legal or regulatory requirements, this document and/or an Application Form must be treated as sent for information only and should not be copied or redistributed.

Persons (including, without limitation, custodians, nominees and trustees) receiving a copy of this document and/or an Application Form and/or any other document issued by the Company in connection with the Open Offer or whose stock account in CREST is credited with Open Offer Entitlements or Excess Open Offer Entitlements should not, in connection with the Open Offer, distribute or send the same in or into, or transfer Open Offer Entitlements or Excess Open Offer Entitlements in or into, any Excluded Territory, including the United States or any jurisdiction where to do so would or might contravene local security laws or regulations. If an Application Form or credit of Open Offer Entitlements or Excess Open Offer Entitlements in CREST is received by any person in any such territory, or by their agent or nominee, he or she must not seek to take up the entitlements referred to in the Application Form or in this document or transfer the Open Offer Entitlements or Excess Open Offer Entitlements in CREST unless the Company determines that such actions would not violate applicable legal or regulatory requirements. Any person (including, without limitation, custodians, nominees and trustees) who does forward this document or an Application Form into any such territories

93 (whether under contractual or legal obligation or otherwise) should draw the recipient’s attention to the contents of this Section.

The Company reserves the right to treat as invalid and will not be bound to allot or issue any New Shares in respect of any acceptance or purported acceptance of the application for New Shares or offer of the Open Offer Entitlements or Excess Open Offer Entitlements which:

(a) appears to the Company or its respective agents to have been executed, effected or despatched from the United States or any other Excluded Territory or any other jurisdiction outside the United Kingdom in which it would be unlawful to execute, effect or despatch such acceptance or purported acceptance unless the Company is satisfied that such action would not result in the contravention of any registration or legal requirement; or

(b) in the case of an Application Form, it provides an address for delivery of the definitive share certificates for New Shares in an Excluded Territory, including the United States, or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements; or

(c) in the case of a credit of New Shares in CREST, the Shareholder’s registered address would be in an Excluded Territory, including the United States, or any other jurisdiction outside the United Kingdom in which it would be unlawful to make such a credit or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements.

Despite any other provisions of this document or the Application Form, the Company reserves the right to permit any Overseas Shareholder to take up his or her entitlements as if it were a Qualifying Shareholder if the Company in its sole and absolute discretion is satisfied that the transaction in question is exempt from or not subject to the legislation or regulations giving rise to the restriction in question. If the Company is so satisfied, the Company will arrange for the relevant Overseas Shareholders to be sent an Application Form if he or she is a Qualifying Non-CREST Shareholder or, if he or she is a Qualifying CREST Shareholder, arrange for the Open Offer Entitlements and Excess Open Offer Entitlements to be credited to the relevant CREST stock account.

Those Overseas Shareholders who wish, and are permitted, to take up their entitlement should note that payments must be made as described in paragraphs 4 and 5 of this Part III.

Overseas Shareholders should note that all subscription monies must be paid in pounds sterling by cheque and should be drawn on a bank in the United Kingdom, made payable to “Equiniti Ltd re: Mitchells & Butlers Open Offer” and crossed “A/C payee only”.

The provisions of this paragraph 8 will apply generally to non-Qualifying Shareholders and other Overseas Shareholders who do not or are unable to take up New Shares provisionally allotted to them.

8.2 United States of America

The New Shares have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, taken up, resold, transferred or delivered, directly or indirectly, into or within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the New Shares in the United States.

The Open Offer will be made to Shareholders by means of a notice in the London Gazette, details of which are provided in paragraph 10 of this Part III. Accordingly, no offering is being made in the United States and neither this document nor the Application Forms constitute or will constitute an offer, or an invitation to apply for, or an offer or invitation to acquire, any New Shares in the United States. Application Forms have not been, and will not be, sent to, and the New Shares, Open Offer Entitlements have not been, and will not be, credited to the CREST account of, any Qualifying Shareholder with a registered address in the United States.

Envelopes containing Application Forms should not be postmarked in the United States or otherwise despatched from the United States, and all persons acquiring New Shares and wishing to hold such shares in

94 registered form must provide an address for registration of the New Shares issued upon exercise thereof outside the United States.

Save with the prior consent of the Company, any person who acquires the New Shares will be deemed to have declared, warranted and agreed, by accepting delivery of this document or the Application Form and delivery of the New Shares, that it is not, and that at the time of acquiring the New Shares it will not be, in the United States or acting on behalf of, or for the account or benefit of a person on a non-discretionary basis in the United States.

Neither the New Shares, the Form of Proxy, the Application Form, this document nor any other document connected with the Open Offer have been or will be approved or disapproved by the SEC or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, nor have any of the foregoing authorities or any securities commission passed upon or endorsed the merits of the offer of the New Shares, the Form of Proxy, the Application Form, or the accuracy or adequacy of this document or any other document connected with the Open Offer. Any representation to the contrary is a criminal offence in the United States.

Any person who acquires New Shares will be deemed to have declared, represented, warranted and agreed to, by accepting delivery of this document or the Application Form or by applying for New Shares in respect of Open Offer Entitlements credited to a stock account in CREST, and delivery of the New Shares, the representations and warranties set out in paragraph 9 of this Part III.

The Company reserves the right to treat as invalid any Application Form: (a) that appears to it or its agents to have been executed in or despatched from the United States or that provides an address in the United States for delivery of definitive share certificates; (b) that does not include the relevant warranty set out in the Application Form to the effect that the person executing the Application Form does not have a registered address (and is not otherwise located) in the United States and is not acquiring the New Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such New Shares in the United States; or (c) where the Company believes acceptance of such Application Form may violate applicable legal or regulatory requirements. The Company will not be bound to allot (on a non-provisional basis) or issue any New Shares in respect of any such Application Form. In addition, the Company and the Receiving Agent reserve the right to reject any USE Instruction sent by or on behalf of any CREST member with a registered address in the United States in respect of the New Shares.

Until 40 days after commencement of the Open Offer, an offer, sale or transfer of the New Shares within the United States by a dealer (whether or not participating in the Open Offer) may violate the registration requirement of the Securities Act.

8.3 Other Excluded Territories

Having considered the circumstances, the Directors have formed the view that it is necessary or expedient to restrict the ability of persons in the other Excluded Territories (i.e. other than the United States) to participate in the Open Offer due to the time and costs involved in the registration of this document and/or compliance with the relevant local legal or regulatory requirements in those jurisdictions. Therefore, subject to certain exceptions, no Application Forms will be sent to, and no Open Offer Entitlements or Excess Open Offer Entitlements will be credited to a stock account in CREST of, persons with registered addresses in the other Excluded Territories. No offer of or invitation to acquire New Shares is being made by virtue of this document or the Application Form into the other Excluded Territories.

8.4 Other overseas territories

Application Forms will be posted to Qualifying Non-CREST Shareholders with registered addresses in other overseas territories and Open Offer Entitlements and Excess Open Offer Entitlements will be credited to the CREST stock accounts of Qualifying CREST Shareholders with registered addresses in other overseas territories. Overseas Shareholders in jurisdictions other than the Excluded Territories may, subject to the laws of their relevant jurisdiction, accept their entitlements under the Open Offer in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders only, the Application Form.

Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, all countries other than the United Kingdom should consult their professional advisers as to whether

95 they require any governmental or other consents or need to observe any other formalities to enable them to take up their Open Offer Entitlements or Excess Open Offer Entitlements.

Member States of the European Economic Area (other than the United Kingdom)

In relation to each member state of the European Economic Area (each, a Relevant Member State), none of the New Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements may be offered or sold to the public in that Relevant Member State prior to the publication of this document in relation to the New Shares, the Open Offer Entitlements and the Excess Open Offer Entitlements, which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with Regulation 2017/1129/EU (the Prospectus Regulation), other than the offers contemplated in this document in a Relevant Member State after the date of such publication or notification, and except that an offer of such New Shares, Open Offer Entitlements or Excess Open Offer Entitlements may be made to the public in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Regulation;

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Regulation) per Relevant Member State, subject to obtaining the prior consent of the Global Co- ordinator for any such offer; or

(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation; provided that no such offer of New Shares, Open Offer Entitlements or Excess Open Offer Entitlements will require the Company to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation and each person who initially acquires any New Shares, Open Offer Entitlements or Excess Open Offer Entitlements or to whom any offer is made under the Open Offer will be deemed to have represented, acknowledged, and agreed that it is a “qualified investor” within the meaning of Article 2(e) of the Prospectus Regulation.

For the purposes of this selling restriction, the expression an “offer of New Shares, Open Offer Entitlements or Excess Open Offer Entitlements to the public” in relation to any New Shares, Open Offer Entitlements or Excess Open Offer Entitlements in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Open Offer and the New Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements to be offered so as to enable an investor to decide to acquire the New Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements.

In the case of the New Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements being offered to a financial intermediary, as that term is used in the Prospectus Regulation, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the New Shares, Open Offer Entitlements or Excess Open Offer Entitlements acquired by it have not been acquired on a non- discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any New Shares, Open Offer Entitlements or Excess Open Offer Entitlements to the public other than their offer or resale in a Relevant Member State to “qualified investors” within the meaning of Article 2(e) of the Prospectus Regulation. The Company, the Underwriters and their respective affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement.

Notice to prospective investors in the Isle of Man

96 9. Representations and warranties relating to Shareholders

9.1 Qualifying Non-CREST Shareholders

Any person accepting an Application Form or requesting subscription to the New Shares as set out therein represents and warrants to the Company and the Underwriters that, except where proof has been provided to the Company’s satisfaction that such person’s use of the Application Form will not result in the contravention of any applicable legal requirements in any jurisdiction: (a) such person is not accepting an Application Form from within the United States or the Excluded Territories; (b) such person is not in any territory in which it is unlawful to make or accept an offer to subscribe for New Shares or to use the Application Form in any manner in which such person has used or will use it; (c) such person is not acting on a non-discretionary basis for a person located within the United States or any Excluded Territory or any territory referred to in (b) above at the time the instruction to accept was given unless: (i) the instruction to request registration was received from a person outside the United States; (ii) the person giving such instruction has confirmed that it has the authority to give such instruction; and (iii) either: (A) has investment discretion over such account; or (B) is an investment manager or investment company, and that, in the case of each of (a) and (b), is acquiring the New Shares in an offshore transaction within the meaning of Regulation S; and (d) such person is not acquiring New Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such New Shares into the United States or any Excluded Territory or any territory referred to in (b) above.

The Company may treat as invalid any acceptance or purported acceptance of the allotment of New Shares comprised in an Application Form if it: (a) appears to the Company to have been executed in or despatched from the United States or any other Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it believes the same may violate any applicable legal or regulatory requirement; (b) provides an address in the United Sates or any Excluded Territory for delivery of definitive share certificates for New Shares (or any jurisdiction outside the United Kingdom in which it would be unlawful to deliver such certificates); or (c) purports to exclude the warranty required by this paragraph 9.1.

9.2 Qualifying CREST Shareholders

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedure set out in this Part III represents and warrants to the Company and the Underwriters that, except where proof has been provided to the Company’s satisfaction that such person’s submission of a USE Instruction will not result in the contravention of any applicable regulatory or legal requirement in any jurisdiction: (a) he or she is not within the United States or any of the Excluded Territories; (b) he or she is not in any territory in which it is unlawful to make or accept an offer to acquire or subscribe for New Shares; (c) he or she is not acting on a non-discretionary basis for a person located within the United States or any other Excluded Territory or any territory referred to in sub-paragraph (b) above at the time the instruction to accept was given; and (d) he or she is not acquiring New Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such New Shares into the United States or any other Excluded Territory or any territory referred to in sub-paragraph (b) above.

The Company may treat as invalid any USE Instruction which: (i) appears to the Company to have been despatched from the United States or any other Excluded Territory or otherwise in a manner which may involve a breach of the laws of any jurisdiction or which it believes may violate any applicable legal or regulatory requirement; or (ii) purports to exclude the warranty required by this Section.

10. Notice in the London Gazette

In accordance with section 562(3) of the Companies Act, the offer to Shareholders who have no registered address in the United Kingdom or an EEA State and who have not given to the Company an address in the United Kingdom or an EEA State for the service of notices, will be made by the Company causing a notice to be published in the London Gazette on 23 February 2021 stating where copies of this document and the Application Form may be obtained or inspected on personal application by or on behalf of such Shareholders. Any person with a registered address, or who is resident or located, in the United States or any of the Excluded Territories or any other jurisdictions where the extension and availability of the Open Offer would breach any applicable law who obtains a copy of this document or an Application Form is required to disregard them, except with the consent of the Company.

However, in order to facilitate acceptance of the offer made to such Shareholders by virtue of such publication, Application Forms will also be posted to Overseas Shareholders who are Qualifying Shareholders. Such

97 Shareholders, if it is lawful to do so, may accept the offer either by returning the Application Form posted to them or by obtaining a copy thereof from the place stated in the notice and returning it in accordance with the instructions set out therein.

11. Waiver

The provisions of paragraphs 8 and 9 of this Part III and of any other terms of the Open Offer relating to non- Qualifying Shareholders may be waived, varied or modified as regards specific Shareholder(s) or on a general basis by the Company in its absolute discretion. Subject to this, the provisions of paragraphs 8 and 9 of this Part III supersede any terms of the Open Offer inconsistent therewith. References in paragraphs 8 and 9 of this Part III and in this paragraph 11 to Shareholders will include references to the person or persons executing an Application Form and, in the event of more than one person executing an Application Form, the provisions of paragraphs 8 and 9 of this Part III and this paragraph 11 will apply jointly to each of them.

12. Times and dates

The Company will in its discretion be entitled to amend the dates that Application Forms are despatched or dealings in New Shares commence and amend or extend the latest date for acceptance under the Open Offer and all related dates set out in this document and in such circumstances will announce such amendments via a Regulatory Information Service and, if appropriate, notify Shareholders.

13. Governing law

The terms and conditions of the Open Offer as set out in this document and the Application Form and any non- contractual obligations arising out of or in relation to the Open Offer will be governed by, and construed in accordance with, English law.

14. Jurisdiction

The English courts will have exclusive jurisdiction in relation to all disputes arising out of or in connection with the Open Offer, this document or the Application Form including, without limitation disputes arising out of or in connection with any non-contractual obligations arising out of or in connection with any of them. By accepting entitlements under the Open Offer in accordance with the instructions set out in this document and, in the case of Qualifying Non-CREST Shareholders, the Application Form, Qualifying Shareholders irrevocably submit to the jurisdiction of the English courts and waive any objection to the exercise of such jurisdiction. Such Qualifying Shareholders also irrevocably waive any objection to the recognition or enforcement in the courts of any other country of a judgment delivered by an English court exercising jurisdiction pursuant to this clause.

98 PART IV BUSINESS OVERVIEW OF THE GROUP

BUSINESS OVERVIEW

Mitchells & Butlers is a leading operator of managed restaurants, pubs and bars in the United Kingdom. As at 26 September 2020, the Group had 1,660 managed businesses and provides a wide choice of eating and drinking-out experiences through its 15 well-known brands, with a focus on great service, quality and value for money to its customers. The Group was formed in 1898 and has grown to become a leading operator of managed restaurants, pubs and bars in the United Kingdom. In FY19, uninterrupted by closure, the Group served nearly 120 million meals, as well as approximately 380 million drinks. As at 26 September 2020, Mitchells & Butlers employed over 40,000 people in pubs, bars and restaurants that are located across the length and breadth of the United Kingdom, with 82 per cent. of the population of Great Britain within five miles of one of its sites. The Group also employs approximately 2,000 people in Germany in its ALEX brasserie restaurants and bars and Miller & Carter restaurant.

Mitchells & Butlers’ strong portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s and Ember Inns. In addition, the Group operates Innkeeper’s Collection hotels in the United Kingdom and ALEX restaurants and bars, plus one Miller & Carter restaurant, in Germany. The Group’s restaurants and pubs have some of the highest average sales and profits per site in the industry and its portfolio of brands are well-known in the United Kingdom with a focus on growth in the eating-out market.

In FY20 the Group was impacted by a prolonged period of enforced closure and social distancing requirements in response to the COVID-19 pandemic. As a result, in FY20 the Group reported total revenues of £1,475 million, an adjusted operating profit of £99 million and a statutory loss before tax of £123 million. The Directors are confident that given the strength and diversification of the Group’s brands, as well as the public’s continuing affinity for pubs and restaurants, the Group is well-placed to recover quickly once restrictions are lifted and will return to long-term growth.

Impact of the COVID-19 pandemic

The COVID-19 pandemic has created significant challenges for hospitality companies given its widespread adverse global economic, social and operational impact. When the full lockdown was announced by the UK Government on 20 March 2020, the Group closed its restaurants, pubs and bars, with its priority being to protect team members and customers and to ensure the safe closure of each site. A similar approach had already been implemented in the Group’s German businesses several days earlier. The Group proactively took a number of measures from the outset of the crisis to protect the business including placing over 99 per cent. of employees on furlough, reducing operating costs to the extent possible, halting all discretionary capital expenditure, including its development programme, as part of a broader cash management plan, working to sell stock with a short shelf life at or below cost and, where this was not possible, donating food stock items to charitable institutions to the extent practicable. To ensure the financial welfare of its employees, the Group also topped up the pay of all those employees paid above the furlough scheme cap to 80 per cent. of normal pay. In addition, during the first national lockdown, the pay of the Executive Committee and the Board was reduced by 40 per cent. and the pay of other members of the leadership team was reduced by 30 per cent.

During the closure period, the Group developed new COVID-19 secure procedures, including clear directional and spacing signage to explain and help maintain social distancing; sanitising stations; disposable menus; table spacing; capacity management where possible through its online booking engines; a cashless-first approach (and in some businesses cashless-only); and new brand specific COVID-19 safe service cycles such as vegetables being served in Toby Carvery, as opposed to the usual self-serve model. The Group has also been required to change the operations of its restaurants, pubs and bars from time to time due to the COVID-19 pandemic in all of the countries in which it operates, although to a different extent and for varying time periods depending on the relevant local restrictions in each jurisdiction. These measures include, among others, reducing capacity due to the implementation of social distancing measures, limits on the number of customers per group, mandatory curfews, the requirement for full table service, the cessation of live music events, mandatory mask wearing and the closure of indoor play areas, all of which further negatively impacted trade.

Mitchells & Butlers has played a full role in the UK Hospitality led forums that have helped to devise the Hospitality Sector Protocols Document that the UK Government issued for the sector and continues to lobby the UK Government directly to ensure that the Company, and the sector, get the support needed to protect jobs until reopening is possible. UK Government support to date has been gratefully received, including the business

99 rates holiday worth approximately £100 million per annum to the Group, and which has benefitted the retail, hospitality and leisure sectors. VAT rates have also been reduced on certain supplies which has had a sector specific benefit to food-led businesses. In June 2020, the Group secured £100 million of additional funding from HSBC UK and Santander UK plc as part of the UK Government backed CLBILS. The Group’s employees have benefitted from the Coronavirus Job Retention Scheme, with £165 million claimed as at 26 September 2020, which has enabled the protection of many roles. Despite this support approximately, 1,300 redundancies had to be made prior to and during November 2020. The reduced levels of activity and closure of a small number of sites meant that these roles could no longer be supported.

The percentage of the Group’s estate that has been closed has varied over the course of the pandemic due to the periodic imposition of mandatory national or local lockdowns in the countries in which the Group operates. The Group’s businesses began to open in the summer of 2020. The Group’s businesses in Germany started to reopen in May 2020 followed by the re-opening of the Group’s businesses in England and Northern Ireland on 4 July 2020, in Scotland with effect from 13 July 2020 and in Wales from 15 July 2020. The COVID-19 secure procedures enabled the Group to reopen safely while still providing a hospitable feel and great experiences for its customers. From 5 July 2020 to 1 August 2020, like-for-like sales declined by 32.4 per cent. as compared to July 2019 as a result of reduced capacity due to the enforcement of social distancing measures and customers’ caution to visit restaurants and pubs. During August 2020, the UK Government-funded ‘Eat Out to Help Out’ scheme plus the temporary reduction in the rate of VAT on certain supplies combined to help return the business to like-for-like sales growth of 1.4 per cent. from 2 August 2020 to 29 August 2020, during which period 94 per cent. of the Group’s UK estate was open. By 26 September 2020, the Group had reopened over 96 per cent. of its estate and while its trading remained resilient into October in comparison to the market, like- for-like sales returned to decline. At brand level, the Group’s premium suburban brands traded well despite the COVID-19 secure protocols, particularly Miller & Carter and Premium Country Pubs. Conversely, city centre led businesses, such as Nicholson’s, struggled with the restrictions, exacerbated by many offices remaining empty.

The Group has also been accelerating its home delivery strategy during the COVID-19 pandemic. As at 26 September 2020, the Group had 379 sites offering delivery through Deliveroo or Just Eat. This trend, whilst still relatively modest, has grown and, as at 7 November 2020, the Group had 470 sites established with online delivery platforms with more expected to become involved once the business re-opens following the closure of the estate in January 2021.

The COVID-19 case numbers began to increase again during September resulting in the introduction of further government restrictions. The increased measures, including a limit of six people per group, a 10.00 p.m. curfew, a requirement to offer full table service and mandatory mask wearing in premises providing hospitality in England, caused a decline in consumer confidence and a reduction in the frequency of customer visits. Trade was further negatively impacted by the introduction of the regional tier system in the United Kingdom whereby household mixing restrictions came into place in some areas and full closure of businesses in others. Meanwhile, a full lockdown was put in place in Wales and Germany, and regional closure of businesses was ordered in Scotland. As a result, like-for-like sales began to deteriorate as the period progressed and an increasing proportion of the Group’s estate fell into Tier 2, 3 or 4 areas in England or were subject to closure in other countries. In addition, a second lockdown began in England on 5 November 2020, requiring the closure of all restaurants, pubs and bars until 2 December 2020. Following this lockdown, the majority of the Group’s estates continued to remain closed due to tier or level restrictions in the United Kingdom, with only 393 sites in the Group’s estate open as at 23 December 2020. The Government mandated the closure of hospitality businesses on 30 December 2020 resulted again in the closure of all of the Group’s restaurants, pubs and bars. The Group had a cash balance of £113 million as at 16 January 2021. On 18 January 2021, the Company and the trustees agreed to a deferment of deficit contributions from January and February to March with immediate effect, and, subject to certain conditions, the two deferred instalments from January and February and the March instalment may be further deferred to April. Taking this into account, from 1 January 2021 through to the date of this document, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also had securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non essential capital expenditure continues to be suspended.

HISTORY OF THE GROUP

Since two Midlands families came together to form Mitchells & Butlers in 1898, the Group has grown to become a leading operator of managed restaurants, pubs and bars in the United Kingdom. In the 1960s, the

100 Group merged with Bass, Ratcliff and Gretton Ltd and then Charrington United, before becoming a part of the Bass PLC group. In the 1990s, as customer tastes changed, food became more important to the Group’s sales. Its first O’Neill’s opened in Aberdeen and its first All Bar One opened in Surrey. In 1995, the Group acquired the Harvester chain from Forte plc. In 1997, it acquired the Browns chain of seven restaurants, and in 1998 acquired the ALEX brand in Germany. In 2000, the Bass Group divested its brewing arm and rebranded itself as Six Continents PLC. In 2003, the pub division was demerged from Six Continents PLC and listed separately to become Mitchells & Butlers once again.

In 2014, the Group acquired the majority of the Orchid Pub Group, including 173 predominantly freehold pubs. The opportunity to acquire these businesses from Orchid expanded Mitchells & Butlers’ share of the eating out market.

In the period from 2015 onwards, the Group has pursued a strategy of investment in its core estate to improve the offer across all of its brands.

COMPETITIVE STRENGTHS

The Directors believe that the Group’s key strengths are as follows:

Mitchells & Butlers is one of the largest managed pub operators in the United Kingdom, with a large, geographically diversified pub portfolio of mostly freehold-backed properties

Mitchells & Butlers is one of the largest managed pub companies in the United Kingdom with 1,660 managed sites trading across the United Kingdom as at 26 September 2020 through a broad portfolio of 15 well-known brands and formats. In FY19, uninterrupted by closure, the Group served nearly 120 million meals, as well as approximately 380 million drinks. As at 26 September 2020, the Group employed over 40,000 people in restaurants, pubs and bars in the United Kingdom across the length and breadth of the country, with 82 per cent. of the population of Great Britain within five miles of one of the Group’s sites. Before the COVID-19 pandemic, the Group generated revenues of £2,237 million in FY19 (£1,475 million in FY20). The Group’s scale provides it with a strong competitive position compared to smaller players in the pub sector. The Group’s formats enjoy a strong degree of brand equity throughout the whole of the United Kingdom, generating customer loyalty and allowing it to communicate its offering to a large customer base. Through the Group’s scale, it has greater purchasing power compared to the majority of its competitors, which allows the Group to achieve more favourable terms with suppliers. Furthermore, given its dense network of sites across the entire country, the Group is able to optimise distribution and logistical functions in a cost efficient way. Its scale also allows it to leverage its central and head office functions in Birmingham, including marketing, human resources and finance, as well as technological infrastructure, highly efficiently.

The Group operates geographically in suburban locations and town centres across the United Kingdom. As of 26 September 2020, approximately 77.2 per cent. of the Group’s restaurants, pubs and bars in the United Kingdom were located in rural, suburban and out-of-town locations, with the remaining 22.8 per cent. located in city centres. The Group’s estate in the United Kingdom comprises predominantly freehold-backed and long leasehold properties (82 per cent. as of FY20). The value of the licensed freehold and long leasehold land and buildings (managed and tenanted) was £3.7 billion as at 26 September 2020.

The Group’s estate is well-diversified both from a geographic and a format perspective:

- The estate is well spread out across the whole of the United Kingdom, with a presence across all regions. While the Group’s estate is distributed relatively evenly across the United Kingdom, it has a strong regional sales presence in London (which represented 21 per cent. of the Group’s managed sales in FY20), South East (which represented 15 per cent. of the Group’s managed sales in FY20) and the West Midlands (which represented 15 per cent. of the Group’s managed sales in FY20).

101 UK Sales by Region – FY20

% of Region Sales 1 Scotland 5% 2 North West 10% 1 3 North East 3% Yorkshire and the 4 8% Humber 5 West Midlands 15% 3 6 East Midlands 5% 2 7 Wales 3% 4 East of England (Ex. 8 8% London) 6 9 South West 7% 5 10 South East (Ex. London) 15% 7 8 11 London 21% 11 10 9 The Company also has 45 sites in Germany. Source: Company Information

- The Group operates through a total of 15 brands or formats of pubs and restaurants serving different demographics and segments of the market and across the United Kingdom, providing significant diversification in terms of format.

Directly managed sites by Brand – As at 26 September 2020

% of % of No. of Group’s No. of Group’s Brand sites estate Brand sites estate

ALEX 44 3% Nicholson’s 79 5%

All Bar One 54 3% O’Neill’s 41 3%

Browns 24 1% Premium Country Pubs 126 8%

Stonehouse Pizza & Castle 108 7% Carvery 95 6%

Ember Inns 148 9% Suburban / Sizzling Pubs 242 15%

Harvester 172 10% Toby Carvery 154 9%

High Street 73 4% Vintage Inns 182 11%

Miller & Carter 118 7%

Source: Company Information

The Group’s large, freehold-backed estate also positions Mitchells & Butlers well for a strong recovery from the COVID-19 pandemic. Given the reduced access to the necessary financing to survive a prolonged period of lower sales, the decline of independent pub and restaurants operators is expected to accelerate. According to an article published by the British Beer and Pub Association in November 2020, sector member research estimates that as many as 12,000 pubs were at risk of permanent closure as a results of the COVID-19 pandemic and therefore significantly reducing supply of pubs in the United Kingdom. The Directors believe that the size of the Group’s estate will be largely unchanged from the pandemic, such that it should be well positioned to benefit from likely supply contraction in the sector and gain market share.

102 Mitchells & Butlers operates in the attractive managed segment of the pub sector, itself a highly resilient industry

The pub sector in the United Kingdom has been a resilient and defensive sector. As pub visits involve low expenditure for the majority of the UK population, the sector tends to be resilient and performs well even during periods of economic downturns. For example, in the aftermath of the great financial crisis in 2009-2010, the Group was able to deliver positive like-for-like sales growth, while the broader economy went through a recession.

Managed pub operators have performed particularly well within the pub sector over the past few years compared to tenanted pub operators and independent pubs. This performance is due to a number of advantages that managed pubs benefit from compared to tenanted and independent pubs. The Directors believe that managed pubs typically generate higher gross margins than tenanted or independent pubs as tenanted pubs are generally required to purchase their beer at a considerable premium from the tenanted pub companies that lease the pubs to them, while independent pubs lack the scale to buy on the best terms. As an almost fully managed pub operator, the Directors believe the Group is well-positioned in this attractive industry.

Mitchells & Butlers has a broad and diversified portfolio of brands and formats that allows it to best serve its wide ranging customer base and adapt to the various demographic changes and trends

Through its broad and diversified portfolio of brands and formats, the Group serves a large customer base across various different segments. The wide range of formats that it offers enables it to continuously optimise its site portfolio and adjust it constantly according to changes in demographics and trends in consumption.

The Group’s 15 brands or formats are divided into four principal trading divisions, covering a broad spectrum of the market:

- Restaurants Division, which as at 26 September 2020 was comprised of 421 sites, of which 154 are Toby Carvery restaurants, 172 are Harvester restaurants and 95 are Stonehouse Pizza and Carvery restaurants. These are all family orientated restaurants offering a broad variety of different cuisines and ambiences for different dining-out occasions, mostly situated in suburban roadside locations;

- Premium Division, which as at 26 September 2020 was comprised of 425 sites, of which 117 are Miller & Carter restaurants, 126 are Premium Country Pubs and 182 are Vintage Inns. These are premium, food-led restaurants and country pubs situated both in rural and urban areas;

- City Division, which as at 26 September 2020 was comprised of 265 sites, of which 24 are Browns brasserie restaurants, 54 are All Bar One city bars and restaurant, 108 are Castle iconic pub restaurants and 79 are Nicholson’s city centre pubs. These are pubs, bars and restaurants often located near city centres and urban locations, serving a broad variety of professional and urban customers; and

- Pubs Division, which as at 26 September 2020 was 504 sites, of which 242 are Suburban/Sizzling Pubs, 148 are Ember Inns, 41 are O’Neill’s bar/restaurants and 73 are High Street unbranded pubs. These are local branded and unbranded pubs, located across residential and suburban areas but also town centres. The unbranded pub division High Street also includes sites that form the pipeline of future conversion to one of the Group’s branded formats.

In Germany, as at 26 September 2020 the Group also had 44 ALEX city centre bars and brasseries in cities across the whole of Germany, one ALEX franchise and one Miller & Carter restaurant in Frankfurt.

The Group seeks to maximize individual site profitability by evaluating the most suitable format for a particular location and customer base on an on-going basis. The Group also has the flexibility to apply the most appropriate format to suit the demographic changes and trends affecting its customer base. The Group has demonstrated its ability to modify its formats to respond to such changes. For example, the Group has been focusing on the premiumisation of all its businesses. This strategy contributed to improved revenue growth on a like-for-like basis as customers are willing to pay more for quality. For example, the Group has rebranded some of its mainstream family restaurants - Harvester - into premium restaurants – Miller & Carter, which significantly increased the average spend per customer. Furthermore, the operating flexibility of using multiple formats allows Mitchells & Butlers to constantly optimise the combination of its food and drinks offerings.

103 Mitchells & Butlers has structural advantages against the impacts of the COVID-19 pandemic

The composition of the Group’s portfolio provides it with structural advantages against the impacts of the COVID-19 pandemic:

- Due to social distancing requirements, locations with bigger spaces and outdoor areas are likely to be preferred over smaller indoor spaces. The Group’s estate, 90 per cent. of which have outdoor space, predominantly consists of larger venues, resulting in an overall average across the entire UK estate, not solely the larger venues, of £26 thousand sales per week in FY19 (pre-COVID-19).

- The majority of employees in the United Kingdom have been required to work from home since March 2020 at varying degrees at different points in time of the pandemic. This poses more of a headwind for high street and city centre sites which are reliant on office workers, and it could shift sales to more suburban locations and to home consumption. The Group generated 73.7 per cent. of its FY20 managed sales from sites falling within its residential / suburban brands, with the remaining part coming from city centre and high street sites (72.5 per cent. FY19).

- Most of Mitchells & Butlers’ operations are branded, which allows it to enforce and advertise consistent brand operational standards (including those relating to hygiene) as well as providing sufficient scale for technology in place for online ordering/booking and delivery services. The larger operators should be better positioned to outperform in a post COVID world, in which there is an increased reliance on technology and brands with the best digital infrastructure likely to gain share. In addition, the fact that the Group’s business is more food-led than drinks-led (with food representing 53 per cent. of the Group’s food and drink sales in FY19) is beneficial as demand switches from higher frequency, social drinking occasions to less frequency, more experiential dining.

- Managed pub operators have significantly more flexibility at the group level to make necessary adjustments to the offering and to adapt to the drastically changed trading environment and customer requirements as a result of the COVID-19 pandemic than tenanted operators. While tenanted operators have to rely on individual tenants to adapt their offering, managed operators have the ability to implement any changes across the whole portfolio unilaterally.

The Group operates with an effective, high returns investment programme

The Directors believe that the strong market position of the Group and the outperformance against the wider market achieved in the past is related to its broad range of brands and offers, which are supported by capital investment programmes focused on premiumisation of offers and reductions in the remodel cycle.

The Group’s main areas of capital investment are maintenance and infrastructure, remodelling of sites (both refurbishments and expansionary), conversion of sites from one brand and/or format to another, and acquisitions.

The key focus of the investment programme is to ensure that the Group’s brands and formats remain fresh and relevant within their market segments by introducing new offers, products and concepts. For example, the Group actively monitors how to improve engagement with customers and customer experience through technology. In FY20 for example, Mitchells & Butlers rolled out its established mobile order-at-table solution to more brands as well as the possibility to pay via mobile app to all brands.

In FY18, FY19 and FY20 the Group invested 7.9 per cent., 6.8 per cent. and 7.3 per cent., respectively, of total sales in its offering through capital expenditure. The majority of the Group’s capital expenditure is focused on remodel and conversion expenditure (representing 53.2 per cent., 53.3 per cent. and 63.9 per cent. in FY18, FY19 and FY20 respectively), maintenance and infrastructure (representing 40.9 per cent., 39.5 per cent. and 35.2 per cent. in FY18, FY19 and FY20, respectively) with the residual part being dedicated to acquisitions (representing 5.8 per cent., 7.2 per cent. and 0.9 per cent. in FY18, FY19 and FY20, respectively).

Despite the suspension of the Ignite programme in March 2020 as part of the cash management strategy in response to the COVID-19 pandemic, Mitchells & Butlers completed 167 remodels and conversions in FY20 (compared with 240 in FY19 and 232 in FY18). The Group’s remodel programme is designed to enhance the amenity and appeal of sites which remain within the same brand, giving the opportunity both to delight existing, and attract new customers. The remodel programme provides a vehicle through which brands can continue to evolve and innovate in the highly competitive market in which the Group operates. The Group is

104 also acutely aware of the potential environmental impact of its investment programme and so, in FY19, it began a programme to refurbish existing kitchen equipment to be used in new projects. In addition, during FY20, the Group established a new partnership with Ramco, which allowed it to save around 200 pieces of kitchen equipment from landfill through resale. Sustainability of the Group’s estate and investments remains a priority for the future.

Mitchells & Butlers reached EBITDA returns on investment of 34 per cent. on its remodel projects and 21 per cent. on its conversion and acquisition projects in FY19 (compared to 27 per cent. and 16 per cent. respectively in FY18). With the aim of further improving returns on investment, the Group has invested in software which enables it to match specific customer criteria against a site location. This technology enables the Group to make data driven investment decisions to ensure that each site operates under the brand which most appropriately matches the needs of the population around it.

In FY20, the EBITDA return on all expansionary capital invested was 6.2 per cent. The reduced level of return is not indicative of the quality of the investment programme, which has performed well over recent years, but is due to the site closure periods and reduced trading levels as a result of the COVID-19 pandemic, which is captured in the calculation.

Highly experienced management team with proven and successful track record

The Group has a strong, experienced senior management team combining complementary skill sets in the pub, restaurant, retail, leisure and services sectors. Mitchells & Butlers is led by Phil Urban, who was promoted to CEO in September 2015 from COO, previously serving as managing director at Grosvenor Casinos (a division of Rank Group and Chairman of the National Casino Forum). Prior to that, he held managing positions at Whitbread and Scottish & Newcastle. Mitchells & Butlers also benefits from the strong experience of its Chairman, Bob Ivell, who was appointed to the Board in May 2011 and has more than 40 years of extensive food and beverage experience with a particular focus on food-led, managed restaurants, pubs and hotels. Mr Ivell is currently a non-executive director of Charles Wells Limited and a board member of UK Hospitality. Previously he held various chairman and board member positions at AGA Rangemaster Group, Britvic, Scottish & Newcastle, Carpetright, Regent Inns, Park Resorts, David Lloyd Leisure Limited, Beefeater Restaurants, one of Whitbread’s pub restaurant brands, and The Restaurant Group. Phil Urban and Bob Ivell are further supported by the Group’s longstanding and highly experienced CFO Tim Jones, who was appointed CFO in October 2010. Before joining the Group, he was group finance director for Interserve, a support services group. Prior to that, he was director of financial operations at Novar and held senior financial roles both in the United Kingdom and overseas in the logistics company, Exel.

Through the leadership of Mitchells & Butlers’ senior management team, it is able to deliver a strong financial performance, driving consistent like-for-like revenue growth and increasing revenues from £2,152 million in FY18 to £2,237 million in FY19. In FY20, revenues (£1,475 million) were heavily impacted by restrictions related to the COVID-19 pandemic and therefore not representative of a normalised performance of the business.

Sustained track record of strong and profitable like-for-like revenue growth

Over the last three years, the Group has been building a sustained track record of outperforming the broader market in terms of like-for-like sales growth. Under the successful leadership of the Mitchells & Butlers management team, headed by CEO Phil Urban since 2015, Mitchells & Butlers has been accelerating investments in its estate to improve, premiumise, and innovate its brands, sites, facilities and offering constantly, which in combination with its large and diversified pub portfolio of attractive brands and formats has helped the Group drive improved sales performance across its sites. The Group’s strategic agenda and Ignite programme of work, a wide range of management improvement initiatives, have been bearing real fruit, for example in building new sales channels. These positive features and initiatives have contributed to the Group’s consistent and profitable like-for-like sales growth, outperforming the broader market over the last three years and reaching 3.5 per cent. of like-for-like growth in FY19, with all of the individual brands in the Group’s portfolio posting positive like-for-like growth for the year.

105 Last Five Years Like-for-Like Performance 3.5% 1.8% 1.9% 1.8% 1.5% 1.0% 1.3% 0.8% 0.7% 0.4% 0.8%

(0.8%)

FY15 FY16 FY17 FY18 FY19 FY20 (to 15-Feb) LfL Sales MAB CGA Coffer Peach Business Tracker Equivalent Periods (excluding MAB)

Source: Company Information, Coffer Peach Business Tracker

STRATEGY

Mitchells & Butlers’ strategy aims to deliver long-term sustainable shareholder value through organic and sustainable growth. In particular, its strategic priorities are the pillars which underpin the activity within the business to drive long-term sustainable growth and ultimately, which enable the Group to achieve its purpose to be the host of life’s memorable moments, bringing people and communities together through great experiences. Through building a strong and efficient business the Group is able to focus on providing experiences which the Mitchells & Butlers team and customers feel good about, including processes which are sustainable and aim to bring people together throughout its supply chain. The Group has maintained consistency in its three strategic priorities over recent years and believes that continued focus in these areas is key to re-establish stability and growth in the business following a period of uncertainty. Mitchells & Butlers’ three strategic priorities are:

- Build a more balanced business.

- Instil a more commercial culture.

- Drive an innovation agenda.

Build a more balanced business

The Group’s objective in this area is to optimise the balance of brands across the estate in order to create long- term shareholder value. In particular, the main areas of focus are:

- To effectively utilise the Group’s estate of largely freehold-backed and long leasehold properties (which represented 82 per cent. of the Group’s estate in the UK and Germany in FY20). - To ensure Mitchells & Butlers is exposed to the right market segments by having the optimal trading brand or concept in each outlet, based on location, site characteristics and local demographics. - To maintain the amenity level of the estate such that the Group operates safely, has the ability to reduce its impact on the environment and remains competitive to customers, alongside meeting cash flow commitments.

Following a 27 per cent. increase in supply in the market from 2014 to 2019, which led to enhanced amenity in new sites, the need to upgrade the guest environment was identified in order to improve the Group’s competitive position. Enhanced amenity also facilitated premiumisation and, therefore, increased spend per head, which was central to the capital investment programme and brand development. An example of this was the Miller & Carter programme through which the brand has grown to 117 sites in the United Kingdom delivering EBITDA returns on total expansionary capital since the start of the programme of 49 per cent. An investment cycle of six to seven years has been targeted under this pillar, from the previous cycle of 11 to 12 years. Since the beginning of the programme in FY16, the Group has completed 946 projects to the end of FY19, and for projects completed in FY19 returns on investment of conversion and acquisition projects were 27 per cent. and remodel returns were 34 per cent.

106 Instil a more commercial culture

The Group’s objective in this area is to achieve profitable sales growth by executing well and at pace. To do so, the main areas of focus are:

- To empower teams across the business to make changes to facilitate sustainable growth and deliver outstanding customer experiences. In particular, teams have quickly adapted to the new COVID- secure procedures required in the Group’s businesses and have worked hard to ensure that customers’ experiences have not been negatively impacted.

- To act quickly and decisively to remain competitive in the Group’s fast-changing marketplace. In particular, in response to the COVID-19 pandemic for example, management of each business delivered good cost control which proved to be essential in limiting the negative financial impacts of prolonged closures. Central procurement teams have worked successfully alongside suppliers to ensure sites were stocked for reopening on relatively short notice, leveraging and maintaining the strong supplier relationships which have already been established. A key objective for FY21 is to react to the new environment to ensure profit maximisation, by increasing average spend and cost control initiatives (among others), and financial stability of the Group.

- To provide training and development opportunities which allow Mitchells & Butlers’ people to thrive within the business.

In sites, managers have been equipped with the knowledge to confidently grow sales in their local markets and have been provided with systems which assist them in running their businesses more efficiently. Centrally, the procurement team continue to leverage the buying power of the Group and have successfully mitigated a large proportion of inflation costs across food, drink and logistics. An example of an initiative in this area is the enhanced labour deployment systems, which have been used in combination with a specialist team of system experts to deliver improved efficiencies. The system generates accurate deployment schedules, individual to the trading patterns of a specific business, enabling the site manager to deploy staff in the most efficient way. An internal team of experts help managers to get the most out of the system and to optimise labour deployment in their business.

Drive an innovation agenda

Technological developments are constantly changing the way customers behave and the Group’s digital strategy is designed to enable it to benefit from those changes and to satisfy customers’ needs:

- To ensure that the Group’s brands and formats remain fresh and relevant within their market segments by introducing new offers, products and concepts. In particular, in FY20 Mitchells & Butlers focused on developing its delivery offers with 470 sites live as at 7 November 2020 with Just Eat and Deliveroo. Expansion of delivery and takeaway offers remains a key area of focus for FY21. - To leverage the increasing role of technology to improve engagement with customers, customer experience as well as efficiency. In particular, in FY20 the Group established mobile order-at-table solution was rolled out to more brands in response to changing customer needs due to COVID-19. In addition, the ability to pay on a mobile phone via a brand app or through Flyt was rolled out across all brands. - To utilise the Group’s scale and position to lead on environmental issues which impact its sector, finding innovative solutions to pressing issues.

To deliver progress across these three strategic priorities, Mitchells & Butlers has established its “Ignite” programme of work, a wide range of management improvement initiatives, which has delivered significant progress over recent years, starting with generating like-for-like sales growth and sustained outperformance of the market, and followed by adjusted operating profit growth of 4.6 per cent. in FY19.

Over the past four years, Ignite initiatives have directly led to enhanced performance over a number of areas, improving the Group’s trading levels and increasing profitability. Examples of the initiatives the Group has rolled out include deploying a sophisticated labour deployment tool, empowering all of its team members to upsell, and improving digital interactions with customers. The Group’s focus on these key strategic areas was reflected in the strong trading performance when it reopened after closure in July.

107 At the beginning of FY20, the Group developed a new wave of initiatives which will form the third wave of Ignite. In the short-term, as a result of the COVID-19 pandemic, it has had to delay some of the initiatives which had been planned under these priorities as the Group focuses on rebuilding trade and remaining flexible in the current uncertain environment. These priorities remain the crucial elements of the business which are expected to drive the long-term growth of the business and will seek to unlock value in these areas through the Ignite work streams.

In parallel, the Group has set targets to operate the business in a sustainable way that underpins the strategic priorities and is a part of the way it wishes to do business. Sustainability is purposefully interlinked into Mitchells & Butlers’ strategic priorities so that it increasingly becomes part of its culture. With regards to sustainability, the four macro targets are:

- Reduce greenhouse gas emissions by 25 per cent. by FY30. In FY20 opportunities to reduce the Group’s consumption of natural resources across the estate were identified and a roadmap to achieve its greenhouse gas reductions was established.

- Reduce food waste by 20 per cent. by FY25. In FY20, despite a reduction in waste related to reduced menus following the COVID-19 related closure, plans to tackle food waste within the Group’s sites were delayed due to closure. Reduction of food waste remains a key priority for FY21.

- Remove unnecessary single-use plastics by FY21. The Group successfully removed the eight items identified by Wrap UK as unnecessary single-use plastics from the business thereby achieving this target. The Group’s focus now moves to other plastics currently used in the organisation with a view to finding alternative products which are more friendly to the environment.

- Increase the proportion of waste recycled to 80 per cent. by FY25. In FY20, a bin optimisation programme was been rolled out to ensure that all sites have the necessary resources and knowledge to help facilitate the Group’s target of higher recycling rates across the business.

The Directors believe that equity capital raised from the Open Offer will provide Mitchells & Butlers with the opportunity to recover from the COVID-19 pandemic in a strong relative position. Leveraging the Group scale, its far reaching, geographically diversified and mostly freehold-backed pub portfolio, the well-known, attractive and relevant brands and formats as well Mitchells & Butlers’ successful management team, the raised equity capital will allow the Group to build on its strategy and the Ignite programme of work to continue Mitchells & Butlers’ strong pre-COVID performance.

THE GROUP’S OPERATIONS

There are four principal trading divisions in the United Kingdom which are:

- Restaurants Division, which is comprised of Toby Carvery, Harvester and Stonehouse Pizza and Carvery;

- Premium Division, which is comprised of Miller & Carter, Premium Country Pubs and Vintage Inns;

- City Division, which is comprised of Browns, All Bar One, Castle Pubs and Nicholson’s; and

- Pubs Division, which is comprised of Suburban/Sizzling Pubs, Ember Inns, O’Neill’s and High Street Pubs.

Restaurants Division

The Restaurant Division as at 26 September 2020 was comprised of 421 sites, of which 154 are Toby Carvery restaurants, 172 are Harvester restaurants and 95 are Stonehouse Pizza and Carvery restaurants. These are all family orientated restaurants and are described in more detail below.

- Toby Carvery – As at 26 September 2020 the Group operated 154 Toby Carvery sites, which is one of the leading brands in the UK carvery sector (in terms of number of sites and sales). Toby Carvery is positioned as the ‘Home of the Roast’ and aims to offer a ‘good value’ varied menu of roasts. The sites are generally in suburban roadside locations and are aimed at a wide range of age groups and roast dinner lovers.

108 - Harvester – As at 26 September 2020 the Group operated 172 Harvesters, which are pub-restaurants in suburban roadside locations, principally targeting families. They offer ‘a feel good, every day treat experience’ and are well known for spit roast chicken, smoked ribs, burgers and the salad cart. All Harvester meals are freshly prepared and the iconic Harvester salad bar is free and unlimited with every main meal.

- Stonehouse Pizza & Carvery – As at 26 September 2020 the Group operated 95 Stonehouse sites, which offer freshly carved, slow cooked roasts, stone baked pizzas made from 100 per cent. fresh dough, pub classics like hand battered fish, plus a range of burgers and vegetarian dishes. With its wide offering, Stonehouse is targeted towards families.

Premium Division

The Premium Division as at 26 September 2020 was comprised of 425 sites, of which 117 are Miller & Carter restaurants, 126 are Premium Country Pubs and 182 are Vintage Inns and are described in more detail below.

- Miller & Carter – As at 26 September 2020 the Group operated 117 Miller & Carter sites, which are steakhouse restaurants offering premium-graded beef. Its beef is dry aged, then wet matured for at least a further 21 days. Miller & Carter has been ‘Awarded Masters of Steak’ from the prestigious Craft Guild of Chefs. It is designed to be the steak lover’s destination for everyday and special dining out occasions.

- Premium Country Pubs – As at 26 September 2020 the Group operated 126 Premium Country pubs, which are a collection of individual pubs situated in both rural and urban areas. The pubs have contemporary dining rooms and bars and many have terraces for al fresco dining. The Group has invested in its gardens with certain sites adding in all-weather areas and staging to host summer garden parties and late al fresco evenings. Premium Country Pubs are aimed at those who appreciate quality food from skilled chefs.

- Vintage Inns – As at 26 September 2020 the Group operated 182 Vintage Inns, which are traditional food-led country pubs serving freshly cooked food with a wide range of beers, sprits and great wines at fair prices. They display the individual pub name with subtle branding on menus and signage and often feature large pub gardens. They are a local escape as the great British country pub. Vintage Inns are designed for those looking to spend time with friends and family in a comfortable familiar setting.

City Division

The City Division as at 26 September 2020 was comprised of 265 sites, of which 24 are Browns brasserie restaurants, 54 are All Bar One city bars and restaurants, 108 are Castle iconic pub restaurants and 79 are Nicholson’s city centre pubs, described in more detail below.

- Browns – As at 26 September 2020 the Group operated 24 Browns restaurants, which are located in city centres around the UK and aim to offer casual, elegant, brasserie dining all day experience, often in landmark architectural buildings. Browns was first established in 1971. The target audience consists of metropolitan professionals and tourists.

- All Bar One – As at 26 September 2020 the Group operated 54 All Bar Ones, which are modern cosmopolitan bars serving food and drink all day in bright contemporary environments positioned in city centre locations. A wide range of drink and food offerings allows All Bar One to attract customers during the day as well as the evening. All Bar One’s target audience consists of metropolitan professionals, especially women.

- Castle – As at 26 September 2020 the Group operated 108 Castle pubs, which are collection of eclectic urban pubs, with each pub having an individual character to suit its community. Castle pubs often feature unusual or exclusive beers amongst its seasonal speciality draught range. Castle also includes some of the most famous pubs in the country, including the White Horse on Parsons Green, world-famous for its beers, the Phoenix in Cavendish Square, the Kings Head in Crouch End, both renowned for their comedy and live music, and the Spaniards Inn on Hampstead Heath, built in 1585 and as famous for its roasts as it is for its history. Castle is targeted towards groups of friends, families and work colleagues living in city and suburban areas.

109 - Nicholson’s – As at 26 September 2020 the Group operated 79 Nicholson’s, which has been in operation since 1873 and is famous for its extensive cask ale and pie range, with many of the Nicholson’s pubs offering over 10 cask ales daily. Its own cask ale, Nicholson’s Pale Ale, is its best- selling cask ale. Nicholson’s sites include examples of historic, authentic pubs in the United Kingdom. The Coal Hole on London’s Strand has been trading since 1780 and the Williamson’s Tavern is said to have the oldest alcohol licence in the city. Nicholson’s is targeted towards city professionals, workers, and domestic and international tourists.

Pubs Division

The Pubs Division as at 26 September 2020 was comprised of 504 sites, of which 242 are Suburban/Sizzling Pubs, 148 are Ember Inns, 41 are O’Neill’s bar/restaurants and 73 are High Street unbranded pubs, described in more detail below.

- Suburban/Sizzling Pubs – As at 26 September 2020 the Group operated 242 Suburban/Sizzling Pubs which are typically located in densely populated residential areas and aim to offer a great local community pub serving ‘value for money’ food on hot (sizzling) skillets. Suburban/Sizzling Pubs target groups of friends aged 25 and above and families.

- Ember Inns – As at 26 September 2020 the Group operated 148 Ember Inns, which are local pubs with an individual name, presented in a contemporary style and offering high-quality drink, food and service, with a wide range of cask ales. They are normally in prominent residential locations, with extensive car parks, and target a wide range of adults from the local area.

- O’Neill’s – As at 26 September 2020 the Group operated 41 O’Neill’s, which are Irish bars that aim to offer the lively and fun atmosphere of the ‘Craic’. They are located in city/town centres and also on suburban high streets. O’Neill’s offers live sports and, in larger sites, entertainment through music rooms with live music ranging from acoustic soloists to indie rock bands throughout the week. O’Neill’s is targeted towards 18-35-year olds.

- High Street – As at 26 September 2020 the Group operated 73 High Street pubs, which are unbranded pubs. These pubs include unique, individual pubs located in high footfall locations in cities and towns throughout the UK. This group of businesses includes several iconic pubs catering to local student populations. The pubs offer music, sport and enjoyable hospitality at competitive price points.

Germany

In Germany the Group had 44 ALEX city centre bars and brasseries as at 26 September 2020 in cities across Germany, one ALEX franchise and one Miller & Carter restaurant in Frankfurt. ALEX offers all day menus and drinking in Germany and more than a million people visit its bars every month. ALEX sites are aimed towards shoppers and office workers during the day and 18-35 year olds in the evening.

Accommodation

The Group also operated 54 Innkeeper’s Collection sites as at 26 September 2020 which offer accommodation above or adjacent to pub-restaurants such as Toby Carvery and Vintage Inns, with just under 1,000 rooms in FY20. They also serve to drive additional food and beverage trade in the associated pub-restaurant.

Delivery

As at 26 September 2020, the Group had 379 sites offering delivery through Deliveroo or Just Eat. The revenue from this channel in FY20 was £5.7 million which represented less than 0.01 per cent. of the Group’s sales. This trend, however, whilst still relatively modest, has grown and, as at 7 November 2020, the Group was established with online delivery platforms at 470 sites with more expected to become involved once the business re-opens following the closure of the estate in January 2021.

Tenancies

The Group also rents out 71 properties operated as tenancies, with the Group receiving premises rent plus turnover or tied revenues from third-party operators. The Group received rental income of £3.1 million from these properties in FY20 (£3.6 million in FY19, a year not impacted by the COVID-19 pandemic).

110 Estate

Mitchells & Butlers Property Department is responsible for all property-related activities of the Group, including strategic portfolio management, brand growth strategies, expansionary investment, rating, acquisition, property development and transaction activity, together with property advice to the Board.

It is also responsible for delivery of the Group’s construction and maintenance programmes. These include new builds, conversions, major refurbishment, building maintenance and compliance activities. Additionally, advice is provided on building policy and technical services throughout the estate. The Mitchells & Butlers Property Department also sources and manages property-related suppliers and contractors.

The Group also owns almost 500 properties or other property related agreements which are outside its estate of licensed premises. These properties comprise a variety of different types from parcels of land to offices and retail developments. They are largely let to third parties and the Group received rental income of £3.8 million from these properties in FY20 (£6.1 million in FY19, a year not impacted by the COVID-19 pandemic).

SALES AND MARKETING

The Group operates a portfolio of brands and formats, each of which has a distinct customer service offer, product range and price point. The major marketing activities are focused on driving sales and maintaining the relevance of brands and formats through the evolution of the range of drinks, menus, pricing activity, design and service innovation. The Group promotes brands and formats through national and local advertising, promotions and through digital marketing. The Group applies a rigorous brand management structure to its business aligned with investment in customer insight.

PROPERTY

As at 26 September 2020, the Group had 1,660 managed properties, of which 1,355 are freehold or long leasehold (one of which is in Germany) and 305 are short leasehold (44 of which are in Germany). Leases are mostly institutional, held on terms of 15 or 25 years and are on standard market terms. 62 of the Group’s leases are due to expire before FY26.

In addition, the Group owns 71 licensed and tenanted properties, and a portfolio of unlicensed properties including both commercial and residential assets let under a variety of tenancies. In FY19 (a year not impacted by the COVID-19 pandemic), revenue from tenanted and unlicensed estates was £17.2 million.

The Group’s offices comprise its headquarters in Birmingham, England, held under a lease expiring in 2044, a smaller office in London which is in the upper floors of a freehold asset owned by the Group and three food development kitchens and skills training facilities in Hemel Hempstead, Walsall and Watford.

The following table shows the number of the Group’s managed properties by region as at 26 September 2020.

111 Number of Number of freehold leasehold Region properties properties Total East Midlands ...... 75 11 86 East of England ...... 98 19 117 London ...... 261 66 327 North East ...... 46 11 57 North West ...... 146 19 165 South East (excluding London) ...... 195 42 237 South West ...... 89 20 109 West Midlands ...... 207 28 235 Yorkshire and the Humber ...... 127 14 141 Wales ...... 48 11 59 Scotland ...... 62 19 81 Northern Ireland ...... 0 1 1 Total (UK) 1,354 261 1,615 Germany(2) ...... 1 44 45 Grand total 1,355 305(1) 1,660

Notes: (1) The leases on seven of the Group’s leasehold properties are due to expire over the next 12 months, of which the Group will not seek to renew the leases on three sites. As regards the other four sites, the Group will seek to renew the leases if acceptable terms can be negotiated. (2) The Group also has one ALEX franchise in Germany.

The net book value of the licensed estate (managed and tenanted) at 26 September 2020 was £4.3 billion. The UK unlicensed estate is included within the annual revaluation exercise for impairment only, as no upward revaluation is recognised for these sites in line with the Group’s accounting policy.

SOURCING

The Group’s suppliers provide the products which allow it to deliver its brand propositions. The Group’s customers’ tastes are continuously evolving and the Directors believe that the Group’s ability to meet changing preferences at scale sets it apart from competitors. During FY19, the Group’s procurement function benefited from a diversified supplier base of approximately 2,100 suppliers, with the largest single supplier representing less than 8 per cent. of materials purchased, the next largest supplier representing less than 6 per cent. of materials purchased and none of the rest of the top 10 suppliers accounted for more than 3 per cent. of all orders. The nature and amount of the Group’s expenditure with suppliers during FY20 is not comparable or representative due to the relevant governments’ mandated closures and restrictions applicable to the Group’s outlets as a result of the COVID-19 pandemic.

The Company aims to build long-term and collaborative partnerships with its suppliers to secure high quality products at a cost which reflects the Group’s size and scale of operations. By working with its suppliers, the Group can develop new and innovative offerings with suppliers which help its brands adapt and evolve. The Group also works with suppliers to understand the environmental impact of its supply chain and to minimise the negative impact of production and transportation. The Group is working to ensure that all of its suppliers can support its sustainability ambitions, including prioritising high animal welfare standards. See “-Sustainability” below for more information.

The Group’s central procurement function and brand teams are responsible for developing open relationships with suppliers which facilitate ongoing communication. The Group sets high standards of practice as part of its supplier agreements and, when necessary, uses its experience to help smaller suppliers achieve those standards. The Group also holds an annual suppliers’ conference to communicate its business ambitions and ways of working including its expected code of conduct and practice.

Food purchasing and food trading

During FY19, the Group served nearly 120 million meals. The number of meals served by the Group during FY20 is not comparable or representative due to the relevant governments’ mandated closures and restrictions applicable to the Group’s outlets as a result of the COVID-19 pandemic. The Group has for many years

112 operated on the basis of regular menu changes for food which are typically annual or twice a year, depending on the offer. This allows the opportunity to refresh the offer and to bring new dishes to the attention of customers. The Group’s priority is to source food products of the right quality at the right price, where the quantity that it needs can be guaranteed.

The Group regards its responsibilities in relation to its customers extremely seriously in ensuring that the food it sources has been produced in an ethical and sustainable manner, taking into account due regard for high standards of animal welfare. The Group has a comprehensive farm animal welfare policy, including extensive species-specific provisions, and has clear processes in place for its implementation internally and through its supply chain.

In general, suppliers to its businesses in the United Kingdom must comply with the ‘BRC Global Standard – Food Safety’ and must achieve a defined standard prior to supplying products to the Group. This process is closely managed internally by a team of highly qualified food technical experts. As additional assurance, each product specification is verified prior to supply to ensure the provenance and associated attributes, such as allergen and nutritional information, are accurate.

A similar level of assurance also applies to the procurement of food and drink for the Group’s German business.

Drinks purchasing

The Group’s drinks team sources and delivers high quality products that suit all its brands. The trading team has two elements, the procurement and category management teams, that work together to balance customers’ needs with commercial considerations. The procurement team works with a large number of suppliers in domestic and international markets, sourcing a wide number of products at optimum terms. These suppliers come in various sizes and deliver both standard and specialist requirements.

HUMAN RESOURCES

The Group’s people are central to its business through engaging interaction with customers and preparation of high-quality food and drink. The Group believes that happy, satisfied employees make for happy, satisfied customers and therefore, it provides all its employees with significant training and career development opportunities. This approach has helped the Group to recruit, train and retain great people at every level in its restaurants and pubs and corporate offices. It’s also allowed the Group to become one of the largest employers in the United Kingdom, with over 40,000 people working for it all over the country as at 26 September 2020.

The Group offers its employees tailored training and has an industry leading digital learning platform. The Group also has an award winning suite of apprenticeship programmes and also provides higher level qualifications such as a post graduate certificate for managers, post graduate diplomas and MBA/MSc programmes. The Group’s careers website also helps ensure it attracts the most talented individuals with a tool that allows retail employees to map out their career path, plan their development and complete training online.

During the various national and regional lockdowns over the course of the COVID-19 pandemic, the Group has furloughed up to 99 per cent. of its employees. Throughout the first period of closure, all employees were kept up to date on key issues through a structured communications plan involving multiple channels, including social media, direct communication, and regular bi-weekly updates from Phil Urban, the Chief Executive Officer. Through the Group’s digital learning hub, team members were able to continue to develop the areas identified in their personal development plans by accessing a range of online resources curated to support key skills by job role and company behaviours. Apprentices were also able to continue their pathways throughout lockdown through a remote learning model. As the lockdowns were lifted, the Group created a comprehensive in-house refreshable return-to-work training package to welcome its teams back to the business and ensure that they were able to keep themselves and customers safe.

The Company aims to reward all its staff fairly and competitively and is proud that so many choose to stay with it for a long period of time. For example, the members of the senior management team have been with the Group for an average of twelve years, and restaurant, pub and bar general managers for an average of nine years. The Group has two formal feedback surveys a year providing the opportunity to gain insight into employee satisfaction and to highlight opportunities to improve its offer as an employer. Employee forums are hosted by the executive team and are open to all employees, giving the opportunity for team members to directly discuss any issues.

113 SUSTAINABILITY

The Group launched a new sustainability strategy in FY19 including committing to a number of ambitious targets across greenhouse gas emissions, recycling, food waste and plastics. The Group successfully manages its energy, waste and water in a way which is cost effective to the business and is increasingly looking for ways to reduce its impact on the environment. The Group has purposefully interlinked its new sustainability plan into its strategic priorities so that it increasingly becomes part of its culture.

Greenhouse gas emissions

The challenge to reduce greenhouse gas emissions is central to the Group’s sustainability strategy and remains a priority for the business. The Group’s target is to reduce greenhouse gas emissions by 25 per cent. by 2030, measuring scope 1, 2 and 3 gases. An example of an area of opportunity to reduce carbon emissions is in the food the Group serves. The food supply chain is the largest single contributor to the Group’s emissions representing 60 per cent. of its total footprint, based on the FY19 baseline. Given the scale of the emissions generated by its food supply, the Group is working with the World Resources Institute on their Cool Food Pledge programme to measure the impact of each ingredient used and to plan a roadmap for emission reduction. The emissions reduction plan will be built with consideration to reducing the negative impact food production has on biodiversity and maintaining high standards of animal welfare.

Innovative energy equipment

The Group has also identified energy, including electricity and gas, as an area of opportunity to achieve its emission reduction target. Within the sphere of this work, the Group is analysing the opportunities to buy greener energy, to reduce consumption through behavioural change and to invest in more efficient equipment.

Smart meters are installed in almost all the Group’s businesses and heat recovery units have been fitted in a number of cellars. This not only allows the recovery of heat, but also reduces maintenance costs by allowing other equipment in the cellars to operate in cooler conditions. The Group also uses free cellar air cooling systems, which draw in cool air from outside when temperatures drop below 8℃ and turns off the traditional cellar cooling process, saving energy every day.

Many of its kitchens use technology to control its extract and air supply fans to ensure that they always run at the lowest speed to minimise energy usage. The Group has also added smart heating controls to compatible sites that allow for better time and temperature control of its businesses.

Waste management

The Group continues to successfully drive its waste disposal strategy, focused on reducing, re-using and effectively recycling the waste generated by its restaurants and pubs. Working alongside Biffa, the Group’s waste management provider, the Group currently recycles cardboard, glass, food and cooking oil, with food waste being recycled through anaerobic digestion. The Group is aiming to recycle 80 per cent. of its waste by 2025. In addition to recycling, the Group is also looking to limit its use of plastic. In FY20, the Group successfully removed eight items identified by Wrap UK as unnecessary single-use plastics and is now looking to find alternative products for other products used in the organisation which are more friendly to the environment.

The Group reduces food waste in the supply chain by donating food which would otherwise be wasted to FareShare, a charity who distribute the food to organisations who can benefit from it. The Group is also trialling the use of ‘Too Good to Go’ – an initiative where surplus food that would normally be thrown away by one of its kitchens is sold at a discounted rate to ensure it is not wasted. The Group is targeting a 20 per cent. reduction in food waste by 2025. In addition, the Group is also using simple but effective products to reduce the volume of water used in each toilet such as Hippo Bags.

PEOPLE AND COMMUNITIES

The Group is committed to being a good neighbour by supporting its communities with both time and expertise. By supporting its employees and businesses across a spectrum of charitable activity and fundraising, the Group continues to build strong relationships with its customers and neighbours and gives back to the communities in which it trades. Many of the Group’s brands are long standing supporters of causes which resonate with the brand and its customers. For example, All Bar One supports Shelter with selected dishes

114 including a donation. Toby Carvery supports the Armed Forces and Nicholson’s supports the Royal National Lifeboat Institute. The Group is always actively looking to enhance the positive impact it can have on local communities, including supporting charities, providing career opportunities and encouraging responsible drinking.

Centrally, the Group supports charities which are focused on supporting people and communities with Mind and Shelter as its charitable partners. Last year, the Group also developed a partnership with FareShare, donating food in its supply chain which would otherwise go to waste. FareShare redistributes this food through a network of 11,000 frontline organisations, across the UK, such as homeless hostels, school breakfast clubs, domestic violence refuges, older people’s lunch clubs, food banks and hospices, ensuring that the donated food goes to those who need it. As a result of the closure of its sites due to the COVID-19 pandemic, throughout FY20 the Group on occasion had excess food stock items which it donated to charitable institutions to the extent practicable. In FY20, the Group provided over 27 tonnes of surplus products to FareShare, equivalent to over 57,000 meals for people in need.

The Group nutritionist also provides expert insight into ways in which the Group can enhance the nutritional content of its offers, and a working group has established a long-term plan focused on enhanced information and balanced choices. In addition, Harvester, a family focused brand, has pledged its support to the Peas Please campaign to ensure each children’s meal contains at least two portions of vegetables.

The Group’s award winning apprenticeship programme offers opportunities to obtain qualifications across a number of specialisms. The programme provides learning and progression opportunities to new and existing employees of all levels enabling social mobility.

INFORMATION TECHNOLOGY

The Group’s information technology systems are managed centrally and cover all key business processes in the value chain, including logistics, stock management and point-of-sale functions. Certain of these systems are considered business critical and are constantly monitored by Fujitsu’s Global Service Operations Centre. In addition, each of the Group’s business units monitors its IT systems on an ongoing basis to ensure that they provide appropriate support for the Group’s business model and strategy.

Improving the Group’s information technology digital platforms has been a key part of the Group’s Ignite programme. Since 2017, the Group has completely transformed its core infrastructure technologies, partly to ensure there is adequate bandwidth for its new ‘software as a service first’ and cloud based solutions, including outsourcing the Group’s network infrastructure, storage and hosting facilities to Fujitsu. Examples of this transformation include upgrading the networking equipment across the whole estate and migrating 70 per cent. of all Windows based servers to the Microsoft Azure Cloud. The Group largely relies on software packages to operate its business, only undertaking bespoke software development for its websites, mobile apps and for systems integrations.

The Group has also recently developed a third-party technology strategy to more effectively move data between the bespoke systems and the systems of third-party business partners’ systems (notably Deliveroo and Just Eat). This ensures seamless integration for customers interacting with the Group and its sites through websites or mobile apps. The Group works with a number of strategic partners, which provide and support some of the critical systems, such as Zonal who are responsible for the ‘point of sale’ till systems.

In addition, in FY19 the Group rolled out an enhancement of its booking platforms that simplified the booking process by reducing the number of steps needed to take to book a table. Booking conversions have increased by 1.3 per cent. as a result of this more seamless experience. The Group has also streamlined its centralised pricing process allowing it to identify pricing opportunities more easily and to move quickly to realise them. The new pricing process effectively uses till software to enable centralised changes to be activated in line with changes to local market dynamics.

Improvements in technology have also been critical in the Group’s response to the COVID-19 pandemic. Technology allows the service cycle to be adapted whilst adhering to Government restrictions. Facilities such as customers’ ability to make an order at the table on their phone has been helping pubs and restaurants to reduce contact between its teams and customers, creating a service cycle with which more people feel comfortable. These types of technological interventions also help to improve the economics of a service cycle which has become more reliant on table service.

115 INTELLECTUAL PROPERTY

The Group owns the rights to the trademark, ‘Mitchells & Butlers’, along with the majority of the other trade names under which it operates, including that of its 15 brands or formats, as well as any material accompanying logos and images. The Group is unable to register certain of its brand names which are generic in nature, such as ‘High Street’, which the Directors’ believe does not present a material issue for the Group. Its core intellectual property consists mainly of certain trademarks and trade names that the Group owns. Trademarks of acquired businesses are transferred into the Group or registered as necessary.

INSURANCE

The Group-wide insurance coverage includes policies for risks associated with its business. These policies provide insurance cover for property damage and business interruption, employers’ liability and public and product liability, in addition to standard corporate insurances including crime and directors and officers liability. The Directors believe that its insurance coverage is sufficient for the risks associated with its operations and that its policies are in accordance with customary industry practices. However, there can be no guarantee that the coverage the Group maintains will be sufficient to cover the cost of defence or other damages in the event of a significant claim or that insurance cover will remain available on the same terms in the market.

REGULATORY AND LICENCING FRAMEWORK

Many of the Group’s facilities and products are subject to various local, national and European laws and regulations relating to food and alcohol and to the safety of products, hygiene, safety and environmental control, including laws relating to air emissions, the remediation of contaminated soil and groundwater, wastewater, discharge, noise, odour and handling and the storage and disposal of waste. Failure to comply with these requirements may result in fines and penalties and liability for compliance costs and damages.

Sale of alcohol legislation

The retail sale of alcohol in England and Wales is currently governed by a licensing system set out in the Licensing Act 2003. For a premises to carry out a licensable activity (such as the sale of alcohol by retail), a premises licence is required. A premises licence can also authorise other licensable activities such as the provision of regulated entertainment and late night refreshment. The licence is applied for and held by the premises licence holder, which can either be an individual (aged 18 or over) or a company (as is the case for Mitchells & Butlers where the relevant group company is the premises licence holder for all its managed premises). For any premises licence which authorises the sale of alcohol, the premises licence holder must nominate a designated premises supervisor. This is the person in day-to-day control of the premises and provides a single point of accountability. The designated premises supervisor must be a premises licence holder, which is obtained by them achieving an accredited licensing qualification and meeting the set criteria for eligibility.

Once granted, a premises licence will continue in force until such time as the business is no longer in existence or the licence is suspended or revoked. An annual fee must be paid for the licence to remain valid. Suspension or revocation can be a consequence of a serious licensing breach such as carrying out unauthorised licensable activities or consistently failing to meet the licensing objectives (which are the prevention of crime and disorder, public safety, the prevention of public nuisance and the protection of children from harm).

Other types of licence which may be required for licensed premises include gaming machine permits (covering the use of gaming machines) and pavement licences (to permit external furniture to be placed on the public highway).

Similar licensing and gaming arrangements exist in Scotland under the Licensing (Scotland) Act 2005. In Northern Ireland and Germany, licensing is subject to the laws and regulations in those countries.

Gaming regulations

The Gambling Act 2005 regulates the use of gaming machines. There are different categories of gaming machines, which relate to the type of machine permitted on different types of premises. Premises licensed for the sale of alcohol for consumption on the premises can have category C or D machines. Upon notification to the local licensing authority, there is an automatic entitlement for such a premises to have up to two category C or D machines. For additional machines, a licensed premises gaming machine permit must be applied for and

116 granted. Category C machines have a maximum stake of £1 and a maximum prize of £100 and must only be used by people aged 18 or over. Category D machines are those such as cranes or coin pushers and have lower stakes/prizes which can be used by any age.

Employment legislation

The UK Working Time Regulations came into effect on 1 October 1998 and control the hours employees are legally allowed to work. Under the legislation, workers may only be required to work a 48-hour week (although they can choose to opt out and work longer if they wish). These regulations also lay down rights and protections in areas such as minimum rest time, days off and paid leave. Many of the Group’s employees are covered by these regulations and almost all of its licensed house managers have signed voluntary ‘opt outs’ which allows them to work longer than the 48-hour week. In addition, the Equal Treatment Directive, ensures that part-time employees enjoy the same rights as full-time employees.

Safety regulation standards

The Group is subject to extensive safety regulations pursuant to the UK Health & Safety at Work Act 1974 and related laws. The Group’s extensive food safety policy encompasses the requirements of, amongst other legal requirements, the Food Safety Act 1990, the General Food Regulations 2004, the Food Hygiene Regulations 2006 and all relevant EU Directives and legislation. The policy sets out the requirements and expectations for cleanliness, food handling and storage, pest control, stock control and waste disposal. The Group also has rigorous food safety procedures based on the principles of hazard analysis and critical control points, including the setting of controls, critical limits and monitoring for key processes, such as receiving food deliveries, defrosting, cooking, cooling and storage.

The Group ensures that all employees receive comprehensive and relevant information on the risks commensurate with their roles to meet legal requirements. All employees receive training on the critical aspects of their roles on induction and throughout their employment through a suite of e-learning and face-to-face courses.

As part of the UK’s Food Hygiene Rating Schemes, the Group’s businesses are visited by environmental health officers who rate the businesses based on structure, hygiene and confidence in management. As at October 2020 (the latest date for which data is available), approximately 86 per cent. of these visits resulted in the maximum rating being awarded for the businesses visited. This system is complemented by a team of internal and external auditors who visit businesses using stricter standards than those required by the relevant authorities. The results of these inspections form part the Group’s key performance indicators.

The Group also ensures that its legal obligations in relation to its supply chain are monitored and measured through a team of technical managers and food technologists. This team is responsible for ensuring that there is full traceability within the product portfolio and that the products adhere to the rigorous standards that the Group sets for its suppliers.

There are similar arrangements in place to ensure that the Group’s German businesses also observe and comply with the relevant safety regulations which apply to them.

117 PART V – OPERATING AND FINANCIAL REVIEW

This Part V should be read in conjunction with the section titled “Presentation of Financial Information”, Part IV – Business Overview of the Group and Part VII – Financial Information of the Group. The financial information considered in this Part V is extracted from the financial information set out in the FY20 Financial Statements, the FY19 Financial Statements and the FY18 Financial Statements.

The following discussion of the Company’s capital resources contains forward-looking statements. The Company’s actual results could differ materially from those that it discusses in these forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Prospectus, particularly under the sections titled “Risk Factors” and “Presentation of Financial Information”.

OVERVIEW

Mitchells & Butlers is a leading operator of managed restaurants, pubs and bars in the United Kingdom. As at 26 September 2020, the Group had 1,660 managed businesses and provides a wide choice of eating and drinking-out experiences through its 15 well-known brands, with a focus on great service, quality and value for money to its customers. The Group was formed in 1898 and has grown to become a leading operator of managed restaurants, pubs and bars in the United Kingdom. In FY19, uninterrupted by closure, the Group served nearly 120 million meals, as well as approximately 380 million drinks. As at 26 September 2020, Mitchells & Butlers employed over 40,000 people in pubs, bars and restaurants that are located across the length and breadth of the United Kingdom, with 82 per cent. of the population of Great Britain within five miles of one of its sites. The Group also employs approximately 2,000 people in Germany in its ALEX brasserie restaurants and bars and Miller & Carter restaurant.

Mitchells & Butlers’ strong portfolio of brands and formats includes Harvester, Toby Carvery, All Bar One, Miller & Carter, Premium Country Pubs, Suburban/Sizzling Pubs, Stonehouse, Vintage Inns, Browns, Castle, Nicholson’s, O’Neill’s and Ember Inns. In addition, the Group operates Innkeeper’s Collection hotels in the United Kingdom and ALEX restaurants and bars, plus one Miller & Carter restaurant, in Germany. The Group’s restaurants and pubs have some of the highest average sales and profits per site in the industry and its portfolio of brands are well-known in the United Kingdom with a focus on growth in the eating-out market.

CURRENT TRADING IN RESPECT OF THE GROUP

Since the UK Government announcement on 30 December 2020 which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group’s sites have been open and the Group is not currently trading. All of the Group’s German businesses were closed on 1 November 2020. In addition, in the FY20 Financial Statements, the Group identified a post-balance sheet event of a reduction of £43 million in the book value of property, plant and equipment, which is summarised in Note 5.4 of the FY20 Financial Statements, which are incorporated by reference into this document.

118 KEY FACTORS AFFECTING THE GROUP’S RESULTS OF OPERATIONS

The results of the Group’s operations have been, and will continue to be, affected by many factors, several of which are beyond the Group’s control. This Section sets out certain key factors the Directors believe have affected the Group’s results of operations in the period under review and could affect its results of operations in the future.

Impact of the COVID-19 pandemic

The Group’s business has been impacted significantly by the COVID-19 pandemic, which has resulted in the Group’s entire estate of restaurants, pubs and bars being closed for significant periods of time. Since the UK Government announcement on 30 December 2020 which placed approximately 78 per cent. of the population of England in tier 4 (the most restrictive tier), none of the Group’s sites have been open and the Group is not currently trading. All of the Group’s German businesses were closed on 1 November 2020. While closed, the Group’s restaurants, pubs and bars still incur costs (including utilities, fixed charges against certain equipment such as dispense gas equipment, licence and insurance costs and rent) while not generating any revenue. The Group had a cash balance of £113 million as at 16 January 2021. On 18 January 2021, the Company and the trustees agreed to a deferment of deficit contributions from January and February to March with immediate effect, and, subject to certain conditions, the two deferred instalments from January and February and the March instalment may be further deferred to April. Taking this into account, from 1 January 2021 through to the date of this document, during which time the Group’s estate has been fully closed, cash burn was estimated to be between £30 million and £35 million per four-week period. In addition, the Group also had securitised debt servicing costs of £51 million per quarter (comprising interest and amortisation), and all non essential capital expenditure continues to be suspended.

In response to the COVID-19 pandemic, the Group has also taken a series of steps that have resulted in additional costs. The Group has also been required to change the operations of its restaurants, pubs and bars from time to time due to the COVID-19 pandemic in all of the countries in which it operates, although to a different extent and for varying time periods depending on the relevant local restrictions in each jurisdiction. These measures include, among others, reducing capacity due to the implementation of social distancing measures, limits on the number of customers per group, mandatory curfews, the requirement for full table service, the cessation of live music events, mandatory mask wearing and the closure of indoor play areas, all of which further negatively impacted trade.

The Group has also been taking, and is continuing to take, steps to mitigate the impact of the COVID-19 pandemic on its business. These include placing over 99 per cent. of UK employees on furlough during the lockdown periods, reducing operating costs to the extent possible, halting all discretionary capital expenditure, including its development programme, as part of a broader cash management plan, working to sell stock with a short shelf life at or below cost and, where this has not been possible, donating food stock items to charitable institutions to the extent practicable. During the first national lockdown in the United Kingdom, with the Group’s sites closed from 20 March 2020 to 4 July 2020, the Group incurred stock losses of £9 million. In the second and third national lockdowns, with the Group’s sites closed from 5 November 2020 to 2 December 2020 and from 30 December 2021 to the date of this document, the Group incurred stock losses of £2 million. The Group has also received support from the UK Government, including the business rates holiday worth approximately £100 million per annum to the Group and a reduction in VAT rates on certain supplies. In June 2020, the Group secured £100 million of additional funding from HSBC UK Bank plc and Santander UK plc as part of the UK Government backed CLBILS. In addition, during the first national lockdown, the Executive Committee’s and the Board’s pay was reduced by 40 per cent. and the pay of other members of the leadership team was reduced by 30 per cent. The Group’s employees have benefitted from the Coronavirus Job Retention Scheme, with £165 million claimed as at 26 September 2020, which has enabled the protection of many roles. Despite this support approximately, 1,300 redundancies had to be made prior to and during November 2020. The reduced levels of activity and closure of a small number of sites meant that these roles could no longer be supported.

119 capacity due to the enforcement of social distancing measures and customers’ caution to visit restaurants and pubs. During August 2020, the UK Government-funded ‘Eat Out to Help Out’ scheme plus the temporary reduction in the rate of VAT on certain supplies combined to help return the business to like-for-like sales growth of 1.4 per cent. from 2 August 2020 to 29 August 2020, during which period 94 per cent. of the Group’s UK estate was open. By 26 September 2020, the Group had reopened over 96 per cent. of its estate and while its trading remained resilient into October in comparison to the market, like-for-like sales returned to decline. At brand level, the Group’s premium suburban brands traded well despite the COVID-19 secure protocols, particularly Miller & Carter and Premium Country Pubs. Conversely, city centre led businesses, such as Nicholson’s, struggled with the restrictions, exacerbated by many offices remaining empty.

General economic environment and trends in customer spending The Group’s results of operations and financial condition are impacted by general economic developments in the United Kingdom and Germany that affect customer spending generally, as well as specific factors that affect customer demand for casual dining experiences and the restaurant, pub and bar environments. General economic factors affecting customer spending include unemployment levels, increased personal debt levels, the availability of discretionary income and customer confidence, particularly by customers living in the communities in which its restaurants, pubs and bars are located. As at 26 September 2020, 97 per cent. of the Group’s total number of restaurants, pubs and bars were based in the United Kingdom, the remainder being in Germany. The Group is therefore impacted by economic conditions and changes in customer habits in the United Kingdom. Soft or weakening economic conditions in the United Kingdom, or in any of the areas in which its restaurants, pubs and bars are located, may cause customers to curtail discretionary spending, which in turn could reduce the Group’s sales. During times of economic uncertainty, customers may dine or drink out less often, lower their expenditure on dining or drinking out, seek cheaper or local alternatives such as local ‘fast food’ restaurants or they may be more likely to seek out the best promotional deals from restaurants, increasing competition.

Changes in customer habits The success of the Group’s business depends on the continued popularity of the range of brands the Group offers and its ability to predict, identify and interpret demand, to anticipate the changing tastes and dietary habits of customers and to introduce successful new food and drink offerings to meet their needs. For example, in recent years customers are increasingly interested in food prepared with more healthy, fresh and sustainable ingredients, as a result of which the Group has introduced new recipes and sourced more high quality ingredients at an increased cost. As a result, the extent of market acceptance of any of the Group’s new food and drink offerings, which may be accompanied by significant levels of promotional expenditures, will affect the Group’s performance in future years.

120 The Group’s sales will decline if it is unable to predict accurately shifts in tastes and preferences or to introduce new and improved food and drink offerings to satisfy changing needs. In addition, given the variety of backgrounds and identities of customers, the Group must offer a sufficient array of offerings to satisfy the broad spectrum of customer preferences. The Group has for many years operated on the basis of regular menu changes for food and regularly reviews its drinks range and makes changes to the drinks and beers offered. However, the popularity of the Group’s foods is impacted by a variety of factors, and could decline as a result of lifestyle, nutrition and health considerations.

Mix of the Group’s trading divisions Each trading division of the Group has different profit margin and growth characteristics. Customer spend per head is higher in the premium division as the average customer has a greater purchasing power and increased willingness to pay for the premium quality of the food and service. While food and drink and labour costs are also higher in the Group’s premium brands, this is generally offset by the increased revenue and therefore cash profit margins tend to be higher. As such, the mix of revenue received each financial year between the four divisions impacts the Group’s results of operations.

Development of the estate

The Group’s financial results are impacted each financial year by the Group’s acquisition and disposal of restaurants, pubs and bars. The number of restaurants, pubs and bars in the managed estate at the dates indicated is shown below.

As at

29 September 2018 28 September 2019 26 September 2020

Freehold properties ...... 1,376 1,359 1,355 Leasehold properties ...... 313 312 305

Total ...... 1,689 1,671 1,660

Food and drink costs

The prices of the raw materials and drinks that the Group and its suppliers use are subject to fluctuations in price. The Group’s food and drink costs were £374 million, £573 million and £562 million during FY20, FY19 and FY18, respectively. As a percentage of restaurant sales, food and drink costs were 26.2 per cent., 26.5 per cent. and 27.0 per cent. during FY20, FY19 and FY18, respectively. This declining cost percentage from FY18 to FY20 reflects the Group’s sensible use of scale purchasing in an inflationary market whilst continuing to grow spend per head.

Such fluctuations are attributable to, among other things, inflation, changes in the supply and demand of crops or other commodities, the weather and growing conditions, fuel prices and government-sponsored agricultural and livestock programmes, food legislation, exchange rates and/or production costs and uncertainty of supply. In particular, the availability and the price of fresh produce and other agricultural commodities, including dairy, oils, meat and seafood, can be volatile. Additionally, epidemics in animal populations (such as variants of the swine flu) and local, national or international quarantines can also adversely affect commodity prices in the long- and short-term. Government export enhancement programmes can also have a material effect on commodity prices. These fluctuations may adversely affect the Group’s suppliers, who could be forced to raise their prices for the Group’s products when renegotiating supply contracts or earlier if not contracted.

The Group and its suppliers use significant quantities of agricultural products provided by non-exclusive third- party suppliers. The Group buys from a variety of producers and manufacturers and alternative sources of supply are generally available. However, the Group has limited ability to hedge against or avoid the adverse effects of pronounced, sustained price increases across the spectrum of its raw material suppliers. The Group attempts to reduce its exposure to price fluctuations in the supply chain by varying contract lengths, reducing exposure on higher cost items by promoting alternatives on its menus and by switching country of origin. However, these measures may not succeed or may not be sufficient to offset price increases. In addition, the Group’s ability to pass on higher costs related to inflation is limited due to customers’ price sensitivity, in particular in the Group’s mainstream brands. The Group may have to absorb changes to its costs, which in turn impacts its gross margins.

121 Labour costs

Labour costs are a significant element of the Group’s operating costs. The restaurant, pub and bar industry is labour intensive and a large component of the Group’s workforce is employed on a part-time basis. Wage rates for a substantial number of the Group’s restaurant, pub and bar staff are at, or slightly above the National Living Wage in the United Kingdom.

The Group’s restaurant labour costs were £481 million (net of furlough costs of £156 million), £667 million and £632 million during FY20, FY19 and FY18, respectively. As a percentage of restaurant sales, restaurant labour costs were 33.4 per cent., 30.6 per cent. and 30.1 per cent. during FY20, FY19 and FY18, respectively. Over the course of the COVID-19 pandemic, the Group has placed over 99 per cent. of UK employees on furlough during the lockdown periods, which, when the estate was fully closed from March 2020 to June 2020 covering three four-week payroll periods, resulted in the Group receiving on average £34 million per four week payroll period by way of furlough scheme salary and wage cost support payments from the UK Government. Restaurant labour costs consist primarily of direct staff employed in individual restaurants (hourly paid staff plus managers and supervisors). Hourly paid staff costs are largely variable in nature and can be managed based on expected customers in the restaurant, while the cost of managers and supervisors and a portion of hourly paid staff costs represent fixed costs.

Competition

The Directors believe that the restaurant, pub and bar industry is highly competitive with respect to price, service, location, food and drink offerings and food quality, and there are some well-established competitors with greater financial and other resources than the Group. Some of the Group’s competitors could use their significant resources to increase their marketing, develop new products or reduce their prices, which could negatively impact the Group’s ability to compete. There is also active competition for management personnel as well as attractive suitable restaurant sites. In the United Kingdom, the market is fragmented with both local and national competitors including, in the restaurant market, the Restaurant Group, the Big Table Group (formerly known as Casual Dining Group), the Azzurri Group and Pizza Express plc and in the pubs and bar market include Greene King, Marston’s plc, Young & Co’s Brewery plc, Stonegate Pub Company, JD Wetherspoon plc, Fuller Smith & Tuner plc and Loungers plc. In Germany, the Group’s competitors in the bar and restaurant market include Cafe & Bar Celona, Cafe Extrablatt and other operators with a similar offering. To a lesser extent, the Group also competes for customers with quick service restaurants (such as McDonald’s and KFC), ‘fast casual’ independent and chain restaurants (such as Nando’s), other casual eating and drinking establishments (such as coffee shops) and convenience and grocery stores.

This competition affects the Group’s pricing strategies and margins. Its ability to compete will depend on the success of its plans to attract customers, respond to customer preferences, manage the complexity of its restaurant operations, respond to its competitors’ actions, including their promotional activities, and retain managerial staff. Although the use of promotional discounts drives traffic, it can lead to a lower average spend per head, and therefore can adversely affect the Group’s results if the increased traffic does not outweigh the decline in average spend per head.

Seasonality

KEY FACTORS AFFECTING COMPARABILITY

IFRS 16

IFRS 16 introduced a single, on-balance sheet accounting model for lessees and sets out the principles for recognition, measurement, presentation and disclosure of leases. As a result, the Group, as a lessee, has recognised right-of-use assets representing its right to use the underlying assets, and lease liabilities representing its obligation to make lease payments. In contrast to lessee accounting, lessor accounting under IFRS 16 is largely unchanged.

122 As described in Note 1 to the FY20 Financial Statements which is incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference, the Group has applied IFRS 16 from 29 September 2019. Given the number of leases and historical data requirements to adopt the full retrospective approach, the Group has applied the modified retrospective approach with assets equal to liabilities, adjusted for any prepaid lease payments, lease incentives, expected dilapidations and lease premiums at transition. As a result, there was no requirement to restate prior period information.

The lease liability is measured at the present value of the lease payments, using the lessee’s incremental borrowing rate specific to term, country, currency and remaining lease term as the discount rate, if the rate implicit in the lease is not readily determinable. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest rate method) and by reducing the carrying amount to reflect the lease payments made. The lease liability is re-measured with a corresponding adjustment to the right-of-use asset, when there is a change in future lease payments resulting from a rent review, change in an index or rate, a change in lease term, e.g. lease extension, or a change in the Group’s assessment of whether it is reasonably certain to exercise or not exercise a break option.

The most significant impact has been that the Group has recognised right-of-use assets of £466 million and lease liabilities of £545 million on transition to the new standard. Right-of-use assets were measured at an amount equal to the corresponding lease liability, adjusted for any prepaid lease payments, lease incentives, expected dilapidations and lease premiums and were subsequently reviewed for transition impairment.

Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. However, IFRS 16 has changed and expanded the disclosures required, in particular regarding how a lessor manages the risks arising from its residual interest in leased assets. Under IFRS 16, an intermediate lessor accounts for the headlease and the sublease as two separate contracts. The intermediate lessor is required to classify the sublease as a finance or operating lease by reference to the right- of-use asset arising from the headlease (and not by reference to the underlying asset as was the case under IAS 17). Due to this change the Group has reclassified certain of its sublease agreements as finance leases. The leased assets of £20 million were derecognised and finance lease asset receivables recognised. As required by IFRS 9, an allowance for expected credit losses £1 million was recognised on the finance lease receivables.

DESCRIPTION OF KEY LINE ITEMS ON THE INCOME STATEMENT

For a description of the Group’s key line items, see Notes 2.1 to 2.4, 3.1 3.6, 4.3 and 4.5 to the FY20 Financial Statements which is incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference.

RESULTS OF OPERATIONS

For a description of the Group’s results of operations for FY20, FY19 and FY18, see the section titled “Financial Review” in the Group’s FY20 Annual Report, FY19 Annual Report and FY18 Annual Report, respectively, which are incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference.

LIQUIDITY AND CAPITAL RESOURCES

The Group’s primary sources of liquidity are the cash flows generated from its operations, along with third party debt and short-term facilities. The primary use of this liquidity is to fund the Group’s operations and, to a lesser extent, capital expenditure.

123 Cash flows

As at 16 January 2021, the Group had a cash balance of £113 million. The table below presents a summary of the Group’s cash flows for the periods indicated.

52 weeks ended 29 September 2018 28 September 2019 26 September 2020 (£ millions) Cash and cash equivalents at the beginning of the period (total) ...... 147 122 133 Net cash from operating activities ...... 240 266 127 Net cash used in investing activities ...... (171) (18) (104) Net cash used in financing activities ...... (94) (237) 1 Foreign exchange movements on cash ...... - - 1 Cash and cash equivalents at end of the period (total) ...... 122 133 158

Net cash flows generated from operating activities

Net cash generated from operating activities decreased by £139 million, or 52.3 per cent., to £127 million in the year ended 26 September 2020 from £266 million in the year ended 28 September 2019, primarily due to the enforced closure of the business as a result of the COVID-19 pandemic.

Net cash generated from operating activities increased by £26 million, or 10.8 per cent., to £266 million in the year ended 28 September 2019 from £240 million in the year ended 29 September 2018, primarily due to improved operating performance of the estate coupled with lower interest and tax payments.

Net cash flows used in investing activities

Net cash used in investing activities increased by £86 million, or 477.8 per cent., to £104 million in the year ended 26 September 2020 from £18 million in the year ended 28 September 2019, primarily due to lower capital spend in FY20 given the closure of the Group’s estate. FY19 benefited from a transfer of £120 million from other cash deposits, subsequently used in that year to repay the Liquidity Facility (see “Borrowings” below).

Net cash used in investing activities decreased by £153 million, or 89.5 per cent., to £18 million in the year ended 28 September 2019 from £171 million in the year ended 29 September 2018, primarily due to a transfer from other cash deposits of £120 million and lower levels of capital expenditure.

Net cash flows generated from / (used in) financing activities

Net cash used in financing activities decreased by £238 million to an inflow of £1 million in the year ended 26 September 2020 from an outflow of £237 million in the year ended 28 September 2019, primarily due to drawings of £100 million under the new term loan facility backed by the CLBILS. FY19 included the repayment of £147 million in relation to the Liquidity Facility.

Net cash used in financing activities increased by £143 million, or 152 per cent., to £237 million in the year ended 28 September 2019 from £94 million in the year ended 29 September 2018, primarily due to the repayment of the Liquidity Facility of £147 million.

124 Borrowings

The table below presents a breakdown of the Group’s interest-bearing loans and borrowings as at the dates indicated.

As at 29 September 28 September 26 September 2018 2019 2020(1) (£ millions) Current Securitised debt(1) ...... 86 95 104 Liquidity Facility ...... 147(1) - 9 Term loan(3) ...... - - 100 Unsecured revolving credit facilities ...... - - 10 Overdraft(4) ...... - - 15 Total Current ...... 233 95 238 Non-current Securitised debt(1) ...... 1,744 1,657 1,542 Total borrowings ...... 1,977 1,752 1,780

Notes: (1) Stated net of deferred issue cost. (2) The drawings under the Liquidity Facility as at 29 September 2018 were on deposit. (3) The term loan is a drawing under a facility that is backed by the Coronavirus Large Business Interruption Loan Scheme. (4) The overdraft is within a cash pooling arrangement. In the cash flow statement, cash and cash equivalents are presented net of this overdraft. The Group’s primary source of borrowing is through a secured financing structure made up of 10 tranches of fully amortising loan notes. These are secured against properties owned by the WBS Group with a net book value of £3,685 million as at FY20, representing 86 per cent. of the Group’s property asset value, and the future income streams generated from those properties. Mitchells & Butlers Retail Limited applies revenue received from these properties to service its debt obligations under the Issuer/Borrower Facility Agreement, which Mitchells & Butlers Finance plc then uses to make payments in respect of the issued notes. For a detailed description of this financing arrangement see paragraph 10.1.2(c) of Part X – Additional Information and Notes 4.1 and 4.2 to the FY20 Financial Statements which is incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference.

As at 26 September 2020, being the Group’s last financial year end, the Group’s weighted average cost of debt was 5.6 per cent. The impact of the increased borrowing costs, fees, changing mix of WBS and unsecured debt and the amortisation profile within the WBS is expected to result in the Group weighted average cost rising to 6.1 per cent. as at the end of FY21, 6.3 per cent. as at the end of FY22, 6.4 per cent. as at the end of FY23 and then stabilise at that level thereafter (assuming that the New Debt Facilities and/or debt within the WBS are not refinanced within this time period).

For a detailed description of all of the Group’s financing agreements see paragraph 10.1.2 of Part X – Additional Information.

Commitments and contingent liabilities Commitments The Group’s commitments primarily relate to lease liabilities. The table below presents a summary of the Group’s commitments as at 26 September 2020.

Less than One to More than one year five years five years Total (£ millions)

Lease liabilities ...... 75 194 515 784 Total ...... 75 194 515 784

125 The leases on seven of the Group’s leasehold properties are due to expire over the next 12 months, of which the Group will not seek to renew the leases on three sites. As regards the other four sites, the Group will seek to renew the leases if acceptable terms can be negotiated.

Contingent liabilities

The Group has no contingent liabilities.

Off-balance sheet arrangements

The Group generally does not use off-balance sheet arrangements.

Capital expenditure

The table below presents a breakdown of the Group’s capital expenditure for the periods indicated.

29 September 28 September 26 September 2018 2019 2020 (£ millions) Maintenance and infrastructure ...... 70 60 38 Remodels - refurbishment ...... 63 65 54 Remodels - expansionary ...... 7 5 2 Conversions ...... 21 11 13 Acquisitions - freehold ...... 7 4 1 Acquisitions - leasehold ...... 3 7 - Total ...... 171 152 108

In FY20, capital expenditure of £108 million comprised £104 million from the purchase of property, plant and equipment and £4 million in relation to the purchase of intangible assets. The Group’s investment programme was suspended in March 2020 as part of the cash management strategy in response to the COVID-19 pandemic, with only essential spend being undertaken since reopening.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

For a description of the Group’s management of funding and liquidity risk, credit risk, capital risk and market risk, see Note 4.4 to the FY20 Financial Statements which is incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

For a description of the Group’s critical accounting judgements and key sources of estimation uncertainty, see Note 1 to the FY20 Financial Statements which is incorporated by reference into this document as described in Part XI – Documentation Incorporated by Reference.

126 PART VI – CAPITALISATION AND INDEBTEDNESS

Capitalisation and indebtedness of the Group

The following tables set out the Group’s capitalisation and indebtedness as at the dates indicated and, as such, do not reflect the impact of the Open Offer.

The following table sets out the Group’s capitalisation as at 26 September 2020.

As at 26 September 2020 (£ millions) Shareholder’s equity Called up share capital ...... 37 Share premium account ...... 28 Capital redemption reserve ...... 3 Revaluation reserve ...... 1,117 Own shares held ...... (3) Hedging reserve ...... (240) Translation reserve ...... 14 Retained earnings ...... 721 Total ...... 1,677

The following table sets out the Group’s capitalisation as at 16 January 2021.

As at 16 January 2021 (£ millions) unaudited Shareholder’s equity Called up share capital ...... 37 Share premium account ...... 28 Capital redemption reserve ...... 3 Revaluation reserve ...... 1,086 Own shares held ...... (3) Hedging reserve ...... (224) Translation reserve ...... 14 Retained earnings ...... 626 Total ...... 1,567

127 The following table sets out the Group’s total indebtedness, excluding lease liabilities as at 16 January 2021.

As at 16 January 2021 £ millions Unaudited Total current debt

Securitised ...... (115) Unsecured ...... (261) (376) Total non-current debt (excluding current portion of long-term debt)

Securitised ...... (1477) Unsecured ...... - (1,477) Total indebtedness ...... (1,853)

The following table sets out the Group’s net indebtedness as at 16 January 2021.

£ millions unaudited Cash ...... 113

Current bank debt ...... (12) Current portion of non-current debt ...... (364) Other financial debt ...... (-) Current financial debt ...... (376)

Net current financial indebtedness ...... (263)

Non-current bank loans ...... (1,508) Non-current derivative asset ...... 31 Non-current financial indebtedness ...... (1,477)

Net financial indebtedness ...... (1,740)

128 PART VII – FINANCIAL INFORMATION OF THE GROUP

FY20 Financial Statements

The FY20 Financial Statements, the FY19 Financial Statements and FY18 Financial Statements, including the corresponding independent auditor’s audit reports, are incorporated into this document, as described in Part XI – Documentation Incorporated by Reference.

The independent auditor’s audit reports in respect of these financial statements are unqualified. However, the independent auditor’s audit report for the FY20 Financial Statements draws attention to a material uncertainty in respect of going concern.

Material uncertainty related to going concern

The independent auditor’s audit report for the FY20 Financial Statements includes the following paragraph. The extract set out below should be read in conjunction with the FY20 Annual Report and Financial Statements and the full audit report included therein.

“We draw attention to note 1 in the financial statements, which indicates that a material uncertainty exists that may cast significant doubt on the Group and parent Company’s ability to continue as a going concern.

The primary source of borrowing for the Group is secured loan notes of £1.6bn at 26 September 2020 (2019 £1.8bn), secured on the majority of the properties owned by the Group as at 26 September 2020, the Group had cash and cash equivalents of £158m, and undrawn committed unsecured facilities of £140m. The existing £150m of revolving credit facilities (RCF) was renegotiated and extended to 31 December 2021 with associated covenants being re-negotiated to reflect new post-Covid trading.

There are covenants attached to both the secured loan notes and the unsecured revolving credit facilities. As part of the revised arrangements noted above it was agreed to waive the six month look-back debt service coverage ratio test up until July 2021 and the 12 month look-back debt service coverage ratio test up until September 2021. The covenants are tested quarterly, are based around the Group’s net worth, debt service, and restricted payment conditions. Consequently, it is most sensitive to the macroeconomic recovery and performance of the Group over the short term trading period.

Management has performed a reverse stress test on the forecast and identified that a further average decline in sales of 4% or more from in the first six months of the year in combination with factoring in some additional tariffs from Brexit would result in a breach in covenants within the going concern period. Management has determined that the decline noted in the reverse stress test is reasonably plausible and we concur with this assessment. A breach in covenants would lead to the need for the Group to negotiate further waivers or renegotiate its borrowing facilities, which the Group have been successful in doing historically.

The Audit Committee has included the adoption of the going concern basis of accounting as a key risk on page 72.

In response to this, we:

• used specialists to perform testing on the mechanical accuracy of the model used to prepare the Group’s cash flow forecast;

• considered the consistency of management’s forecasts with other areas of the audit, including the right of use asset impairment review and revaluation of freehold and long leasehold properties (including consideration of management’s experts view of the likely recovery);

• challenged the key assumptions within the going concern assessment including the key assumptions in the performance over the festive period and sales recovery trajectory. We have challenged with reference to the historical trading performance, current trading uncertainty, market expectations, Government announcements and peer comparison;

• obtained an understanding of the financing facilities available to the Group, which involved the use of restructuring specialists and included understanding repayment terms and covenant definitions;

129 • assessed the impact of reverse stress testing on the Group’s funding position and covenant calculations, including the appropriateness of coronavirus and Brexit assumptions;

• assessed and challenged the mitigating actions available to management, should these be required to offset the impact of the forecast performance not being achieved;

• assessed the appropriateness of risk factors disclosed in the Group’s going concern statement and the financial impact of those risk factors; and

• challenged the sufficiency of the Group’s disclosures over the going concern basis and material uncertainties arising.

As stated in note 1, these events or conditions, along with the matters as set forth in note 1 to the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Group’s and the parent Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”

130 PART VIII – UNAUDITED PRO FORMA FINANCIAL INFORMATION

SECTION A – ACCOUNTANTS’ REPORT ON THE PRO FORMA FINANCIAL INFORMATION

Deloitte LLP 1 New Street Square London EC4A 3HQ

The Board of Directors on behalf of Mitchells & Butlers plc 27 Fleet Street Birmingham B3 1JP

Morgan Stanley & Co. International plc 25 Cabot Square Canary Wharf London E14 4QA

22 February 2021

Dear Sirs/Mesdames,

Mitchells & Butlers plc (the Company)

We report on the pro forma financial information (the “Pro forma financial information”) set out in Section B of Part VIII of the prospectus dated 22 February 2021 (the “Prospectus”). This report is required by the UK version of the Commission delegated regulation (EU) 2019/980 (the “Prospectus Delegated Regulation”) and is given for the purpose of complying with that regulation and for no other purpose.

Opinion

In our opinion:

(a) the Pro forma financial information has been properly compiled on the basis stated; and

(b) such basis is consistent with the accounting policies of the Company.

Responsibilities

It is the responsibility of the directors of the Company (the “Directors”) to prepare the Pro forma financial information in accordance with Annex 20 sections 1 and 2 of the Prospectus Delegated Regulation.

It is our responsibility to form an opinion, as to the proper compilation of the Pro forma financial information and to report that opinion to you in accordance with Annex 20 section 3 of the Prospectus Delegated Regulation.

Save for any responsibility arising under Prospectus Regulation Rule 5.3.2R(2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Annex 1 item 1.3 of the Prospectus Delegated Regulation, consenting to its inclusion in the Prospectus.

131 Basis of preparation

The Pro forma financial information has been prepared on the basis described, for illustrative purposes only, to provide information about how the Open Offer might have affected the financial information presented on the basis of the accounting policies adopted by the Company in preparing the financial statements for the financial year ended 26 September 2020.

Basis of opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Financial Reporting Council in the United Kingdom. We are independent of the Company in accordance with the Financial Reporting Council’s Ethical Standard as applied to Investment Circular Reporting Engagements, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the Directors.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in jurisdictions outside the United Kingdom, including the United States of America, and accordingly should not be relied upon as if it had been carried out in accordance with those standards or practices.

Declaration

For the purposes of Prospectus Regulation Rule 5.3.2R(2)(f), we are responsible for this report as part of the Prospectus and declare that to the best of our knowledge, the information contained in this report is, in accordance with the facts and that the report makes no omission likely to affect its import. This declaration is included in the Prospectus in compliance with Annex 1 item 1.2 of the Prospectus Delegated Regulation.

Yours faithfully

Deloitte LLP

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London, EC4A 3HQ, United Kingdom. Deloitte LLP is the United Kingdom affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (DTTL). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients.

132 SECTION B – PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma statement of net assets (the Pro Forma Financial Information) set out in Section A of this Part VIII is based on the consolidated net assets of the Group set out in the FY20 Financial Statements. The Unaudited Pro Forma Financial Information has been prepared to illustrate the effect of the Open Offer on the Group’s net assets as at 26 September 2020 as if the Open Offer had been undertaken at that date.

The Pro Forma Financial Information has been prepared in accordance with Annex 20 of the UK Prospectus Regulation on the basis of the notes set out below, and in a manner consistent with the accounting policies adopted by the Group in preparing its consolidated financial statements for the 52 weeks ended 26 September 2020. It has been prepared for illustrative purposes only and, due to its nature, the Pro Forma Financial Information addresses a hypothetical situation and, therefore, does not represent the Group’s actual financial position or results.

The Pro Forma Financial Information does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act. Shareholders should read the whole of this document and not rely solely on the Pro Forma Financial Information contained in this Part VIII.

Deloitte LLP’s report on the Pro Forma Financial Information is set out in Section A of this Part VIII.

Group as at Adjustment Pro forma 26 September for the Open net assets of 2020 Offer the Group Note 1 Note 2 £ million £ million £ million Non-current assets Goodwill and other intangible assets ...... 14 — 14 Property, plant and equipment ...... 4,305 — 4,305 Right-of-use assets ...... 402 — 402 Interests in associates ...... 4 — 4 Finance lease receivables ...... 15 — 15 Deferred tax assets ...... 85 — 85 Derivative financial instruments ...... 45 — 45 Total non-current assets ...... 4,870 — 4,870

Current assets Inventories ...... 22 — 22 Trade and other receivables ...... 41 — 41 Current tax assets ...... 1 — 1 Finance lease receivables ...... 2 — 2 Cash and cash equivalents ...... 173 279(i) 452 Derivative financial instruments asset < 1 year ...... — — — Assets held for sale ...... — — — Total current assets ...... 239 279 518 Total assets ...... 5,109 279 5,388

Current liabilities Pension liabilities ...... (51) — (51) Trade and other payables ...... (314) (314) Current tax liabilities ...... — — — Borrowings ...... (238) 60(ii) (178) Current Lease liabilities ...... (58) — (58) Derivative financial instruments ...... (40) — (40) Total current liabilities ...... (701) 60 (641)

Non-current liabilities Pension liabilities ...... (142) — (142) Borrowings ...... (1,542) 1(iii) (1,541) Lease liabilities ...... (483) — (483) Derivative financial instruments ...... (257) — (257)

133 Group as at Adjustment Pro forma 26 September for the Open net assets of 2020 Offer the Group Note 1 Note 2 £ million £ million £ million Deferred tax liabilities ...... (302) — (302) Provisions ...... (5) — (5) Total non-current liabilities ...... (2,731) 1 (2,730) Total liabilities ...... (3,432) 61 (3,371) Net assets ...... 1,677 340 2,017

Notes 1. The net assets of the Group at 26 September 2020 have been extracted without material adjustment from the FY20 Financial Statements, incorporated by reference in Part XI—Documentation Incorporated by Reference of this document. 2. The adjustments to reflect the impact of the Open Offer are as follows: i. £279 million increase in cash, being: Gross proceeds (see Section 3 of Part I of this document) . . . . . £350 million Fees, excluding VAT (see Section 3 of Part I of this document) . . £(11 million) Repayment of debt (see note 2ii below) ...... £(60 million) £279 million ii. £60 million of debt repayments is attributable to two separate tranches of debt: • £50 million of CLBILS term loan debt with one counterparty (HSBC) outstanding at 26 September 2020 (see note 3a below); and • Full repayment of the £150 million bilateral revolving facility agreements. Although these were fully drawn at the date of this document, the adjustment of £10 million reflects the balance as at the balance sheet date of 26 September 2020 in this pro forma. iii. £1 million of costs capitalised against borrowings in relation to the refinancing in accordance with the Group’s accounting policies. 3. Section 3 of Part I of this document describes further uses of proceeds, however, no adjustments have been made for the following: a. The directors also intend to repay the £50 million of CLBILS term loan with Santander, however, as the date for repayment has not been agreed at the date of this document, no adjustment has been made to the pro forma; b. Payments in relation to overdue rental amounts, as these amounts were not all overdue as at 26 September 2020. Management will continue with ongoing discussions regards payment deferral plans and rent incentives. c. Payment to HMRC in relation to overdue VAT amounts, as the Company will apply for the VAT Deferral Scheme, which allows repayment in instalments from March 2021. d. Repayment of the liquidity facility, as there is no commitment to repay any balance before the September 2021 note payment date. Balance owed as at 26 September 2020 was £9 million. e. Repayment of deferred pensions amounts, as none of these were overdue as at 26 September 2020. 4. No account has been taken of the trading of the Group since 26 September 2020. The cash balance as at 16 January 2021 had fallen to £113 million from £173 million at 26 September 2020 and borrowings had increased to £1,884 million from £1,780 million. Inclusive of the movement in financial instruments hedging the securitised debt, total net debt increased by £177 million from 26 September 2020 to 16 January 2021.

134 PART IX – TAXATION

1. United Kingdom taxation

The following statements are intended only as a general guide to certain United Kingdom tax considerations and do not purport to be a complete analysis of all potential United Kingdom tax consequences of acquiring, holding or disposing of New Shares. Prospective acquirers of New Shares are advised to consult their own professional advisers concerning the tax consequences of the acquisition, ownership and disposition of New Shares. The following statements are based on current United Kingdom law and what is understood to be the current practice of HM Revenue & Customs (HMRC) as at the date of this document, both of which may change, possibly with retroactive effect. They apply only to Shareholders who are resident, and in the case of individuals domiciled, for tax purposes in (and only in) the United Kingdom, who hold their Shares as an investment (other than where a tax exemption applies, for example where the Shares are held in an individual savings account or pension arrangement), and who are the absolute beneficial owners of both their Shares and any dividends paid on them.

The tax position of certain categories of Shareholders who are subject to special rules is not considered and it should be noted that they may incur liabilities to United Kingdom tax on a different basis from that described below. This includes persons acquiring their New Shares in connection with employment, dealers in securities, traders, brokers, banks, financial institutions, insurance companies, collective investment schemes, charities, exempt pension funds, persons connected with the Company or the Group, persons holding Shares as part of hedging or conversion transactions, Shareholders who are not domiciled or not resident in the UK, collective investments schemes, trusts and those who hold 5 per cent. or more of the Shares, any person holding investments in any HMRC-approved arrangements or schemes, temporary non-UK residents and non-UK residents carrying on a trade, profession or vocation in the United Kingdom (whether through a branch or agency or, in the case of a corporate Shareholder, a permanent establishment or otherwise).

The comments set out below do not include a consideration of the potential UK inheritance tax consequences of holding Shares. Prospective acquirers of New Shares should consult their own professional advisers in relation to the potential UK inheritance tax consequences of holding them.

The statements summarise the current position and are intended as a general guide only. Prospective acquirers of New Shares who are in any doubt about their taxation position or who may be subject to tax in a jurisdiction other than the United Kingdom are strongly recommended to consult their own professional advisers.

1.1 Taxation of chargeable gains

1.1.1 United Kingdom tax resident Shareholders

(a) New Shares acquired pursuant to the Open Offer

The published practice of HMRC to date has been to treat an acquisition of shares by an existing shareholder up to his, her or its pro rata entitlement pursuant to the terms of an open offer as a reorganisation for the purposes of United Kingdom taxation on chargeable gains (CGT). However, it is understood that HMRC may not apply this practice in circumstances where an open offer is not made to all shareholders. HMRC’s treatment of a Qualifying Shareholder’s acquisition of New Shares up to their Open Offer Entitlement as a reorganisation cannot therefore be guaranteed and specific confirmation has not been requested in relation to the Open Offer.

If the issue of New Shares under the Open Offer is regarded as involving a reorganisation, then a Qualifying Shareholder who acquires New Shares up to the level of his, her or its Open Offer Entitlement will not be regarded as making any disposal of his, her or its Existing Shares. Instead, the New Shares acquired by the Qualifying Shareholder and the Existing Shares in respect of which they are issued will, for CGT purposes, be treated as the same asset and as having been acquired at the same time as the Existing Shares. The amount paid for the New Shares will be added to the base cost of the Existing Shares when computing any gain or loss on any subsequent disposal. To the extent that a Qualifying Shareholder takes up New Shares in excess of his, her or its Open Offer Entitlement pursuant to the Excess Application Facility, that will not constitute a reorganisation.

If, or to the extent that, the issue of New Shares under the Open Offer (including pursuant to the Excess Application Facility) is not regarded as a reorganisation, the New Shares acquired by each Qualifying

135 Shareholder will, for CGT purposes, be treated as acquired separately from the Existing Shares. To the extent that a Qualifying Shareholder acquires more New Shares (including pursuant to the Excess Application Facility) than their pro rata entitlement, the acquisition may be treated as a disposal in respect of the Qualifying Shareholder’s Existing Shares, which may trigger a chargeable gain for CGT purposes. Subject to specific rules for acquisitions within specified periods either side of disposal, and for pre-1982 holdings held by corporate Shareholders, the Existing Shares and New Shares will be treated as a single ‘pooled’ asset, the base cost of which will be the aggregate of the amount paid for the New Shares and the base cost of the Existing Shares.

(b) Disposals

If a Shareholder sells or otherwise disposes of all or some of the New Shares, he or she may, depending on his or her circumstances and subject to any available exemption or relief, incur a liability to CGT.

Corporate Shareholders within the charge to UK corporation tax which realise a gain will, subject to the availability of any exemptions, reliefs and/or allowable losses, be subject to corporation tax (at a current rate of 19 per cent.).

1.2 Taxation of dividends

The Company is not required to withhold United Kingdom tax when paying a dividend. Liability to tax on dividends will depend on the individual circumstances of a Shareholder.

1.2.1 United Kingdom resident individual Shareholders

Under current United Kingdom tax rules, specific rates of tax apply to dividend income. These include a nil rate of tax (the nil rate band), which (for the current tax year, ending on and including 5 April 2021, and subject to change, including in subsequent tax years) applies to for the first £2,000 of non-exempt dividend income in any tax year and different rates of tax for dividend income that exceeds the nil rate band. For these purposes, ‘dividend income’ includes United Kingdom and non-United Kingdom source dividends and certain other distributions in respect of shares.

An individual Shareholder who is resident for tax purposes in the United Kingdom and who receives a dividend from the Company will not be liable to United Kingdom tax on the dividend to the extent that (taking account of any other non-exempt dividend income received by the Shareholder in the same tax year) that dividend falls within the nil rate band.

To the extent that (taking account of any other non-exempt dividend income received by the Shareholder in the same tax year) the dividend exceeds the nil rate band, it will be subject to income tax at 7.5 per cent. to the extent that it falls below the threshold for higher rate income tax. To the extent that (taking account of other non-exempt dividend income received in the same tax year) it falls above the threshold for higher rate income tax then the dividend will be taxed at 32.5 per cent. to the extent that it is within the higher rate band, or 38.1 per cent. to the extent that it is within the additional rate band. For the purposes of determining which of the taxable bands dividend income falls into, dividend income is treated as the highest part of a Shareholder’s income. In addition, dividends within the nil rate band which would (if there were no nil rate band) have fallen within the basic or higher rate bands will use up those bands respectively for the purposes of determining whether the threshold for higher rate or additional rate income tax is exceeded. The above rates apply during the current tax year (ending on and including 5 April 2021) and are subject to change, including in subsequent tax years.

1.2.2 United Kingdom resident corporate Shareholders

It is likely that most dividends paid on the Shares to United Kingdom resident corporate shareholders would fall within one or more of the classes of dividend qualifying for exemption from corporation tax. However, it should be noted that the exemptions are not comprehensive and are also subject to anti-avoidance rules. Shareholders within the charge to corporation tax should consult their own professional advisers.

136 1.3 United Kingdom stamp duty and stamp duty reserve tax (SDRT)

1.3.1 The Open Offer

No stamp duty or SDRT will be payable on the issue of New Shares pursuant to the Open Offer, other than as explained below.

1.3.2 Subsequent transfers

Stamp duty at the rate of 0.5 per cent. (rounded up to the next multiple of £5) of the amount or value of the consideration given is generally payable on an instrument transferring Shares. A charge to SDRT will also arise on an unconditional agreement to transfer Shares (at the rate of 0.5 per cent. of the amount or value of the consideration payable). However, if within six years of the date of the agreement becoming unconditional an instrument of transfer is executed pursuant to the agreement, and that instrument is duly stamped upon payment of the stamp duty, any SDRT already paid will be refunded (generally, but not necessarily, with interest) provided that a claim for payment is made, and any outstanding liability to SDRT will be cancelled. The liability to pay stamp duty or SDRT is generally satisfied by the purchaser or transferee. An exemption from stamp duty is available on an instrument transferring Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000.

In cases where Shares are transferred to a connected company (or its nominee), stamp duty or SDRT may be chargeable on the higher of: (a) the amount or value of the consideration; and (b) the market value of the Shares.

(a) Shares held through paperless means including CREST

Paperless transfers of Shares, such as those occurring within CREST, are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration. CREST is obliged to collect SDRT on relevant transactions settled within the system. The charge is generally borne by the purchaser. Under the CREST system, no stamp duty or SDRT will generally arise on a transfer of Shares into the system unless such a transfer is made for a consideration in money or money’s worth, in which case a liability to SDRT (usually at a rate of 0.5 per cent.) will arise.

In cases where Shares are transferred to a connected company (or its nominee), SDRT (or stamp duty) may be chargeable on the higher of: (i) the amount or value of the consideration; and (ii) the market value of the Shares.

(b) Shares held through Clearance Systems or Depositary Receipt Arrangements

Special rules apply where Shares are issued or transferred to, or to a nominee or agent for, either a person whose business is or includes issuing depositary receipts or a person providing a clearance service. In these circumstances, SDRT or stamp duty may be charged at a rate of 1.5 per cent., with subsequent transfers within the clearance service or transfers of depositary receipts then being free from SDRT or stamp duty. HMRC accept that this charge is in breach of EU law so far as it applies to new issues of shares or transfers that are an integral part of a capital raising, and it was confirmed in the Autumn 2017 Budget that the Government intend to continue this approach following Brexit. HMRC’s published view is that the 1.5 per cent. SDRT or stamp duty charge continues to apply to other transfers of shares into a clearance service or depositary receipt arrangement, although this has been disputed. Further litigation indicates that certain transfers of legal title to clearance services in connection with listing, but not integral to a new issue, are also not chargeable. In view of the continuing uncertainty, specific professional advice should be sought before incurring a 1.5 per cent. stamp duty or stamp duty reserve tax charge in any circumstances.

The statements in this paragraph 1.3 apply to any holders of Shares irrespective of their residence, summarise the current position and are intended as a general guide only. Special rules apply to agreements made by, among others, intermediaries.

137 PART X – ADDITIONAL INFORMATION

1. Responsibility

The Company and the Directors, whose names and principal functions appear on page 44 of this document, accept responsibility for the information contained in this document. To the best of the knowledge of the Company and the Directors, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect its import.

2. Incorporation and registered office

2.1 The Company was incorporated on 2 October 2002 as a public limited company under the Companies Act 1985 and is registered in England and Wales with registered number 04551498. Its Legal Entity Identifier is 213800JHYNDNB1NS2W10.

2.2 The Company’s registered office is 27 Fleet Street, Birmingham, B3 1JP.

3. Share capital

3.1 Immediately prior to the publication of this document, the share capital of the Company was £36,666,653, comprised of 429,268,130 Existing Shares of 8 13/24 pence each, all of which were fully paid or credited as fully paid. The Company has no Shares held as treasury shares. The Existing Shares in the share capital of the Company have a nominal value of 8 13/24 pence each and are listed on the premium listing segment of the Official List and admitted to trading on the London Stock Exchange’s main market for listed securities.

3.2 As at 19 February 2021 (being the latest practicable date prior to the date of this document), the issued and fully paid ordinary share capital of the Company was as follows:

Number of Amount of share Existing Shares capital (£) Shares ...... 429,268,130 36,666,653

3.3 The issued and fully paid ordinary share capital of the Company immediately following completion of the Open Offer, assuming no options granted under the Shares Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and the completion of the Open Offer, and all of the New Shares are issued will be:

Number of Amount of share Shares capital (£) Shares ...... 596,205,736 50,925,907 3.4 Subject to Admission, pursuant to the Open Offer, up to 166,937,606 New Shares will be issued at a price of 210 pence per New Share. This will result in the issued ordinary share capital of the Company increasing by up to approximately 38.9 per cent. Shareholders who do not, or are not, permitted to acquire the New Shares will be diluted by up to 28.0 per cent. following the Open Offer, assuming no options granted under the Share Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and completion of the Open Offer.

3.5 As described in Part I – Letter from the Chairman of Mitchells & Butlers plc of this document, at the General Meeting, Shareholders will be asked to consider and vote on the Resolutions. The Resolutions are each ordinary resolutions to: (a) authorise the Board to issue New Shares pursuant to or in connection with the Open Offer; (b) approve the discount at which the New Shares will be issued; and (c) authorise the Directors to implement the Open Offer. These ordinary resolutions will pass if more than 50 per cent. of the votes cast (either in person or by proxy) are in favour.

3.6 The New Shares will have the same rights in all respects as the Existing Shares (including the right to receive all dividends or other distributions declared after the respective dates of their issue).

138 3.7 The New Shares will trade under ISIN GB00B1FP6H53 and SEDOL number B1FP6H5.

4. Rights attached to the New Shares

The Articles of the Company are available for inspection on the Company’s website as specified in paragraph 19 of this Part X.

The Company’s objects are unrestricted. The Articles include provisions, among others, to the following effect:

Share rights

Without prejudice to any rights attached to any existing shares or class of shares: (a) any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, in the absence of any such determination, as the Board will determine; and (b) subject to the provisions of the Act, shares may be issued which are to be redeemed or are liable to be redeemed at the option of the Company or the holder and the Board may determine the terms, conditions and manner of redemption of such shares provided that it does so prior to the allotment of those shares.

There is no right of conversion or redemption attached to the New Shares.

The New Shares will be in registered form and are capable of being held in uncertificated form.

Dividend rights

All New Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all dividends and other distributions made, paid or declared after the date of the New Shares.

Subject to the provisions of the Act, the Company may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend will exceed the amount recommended by the Board.

Except as otherwise provided by the rights and restrictions attached to any shares, all dividends will be declared and paid according to the amounts paid up on the shares on which the dividend is paid, but no amount paid on a share in advance of the date on which such amount is payable will be treated for these purposes as paid on the share.

The Directors may deduct from any dividend or other monies payable on or in respect of any shares all sums of money (if any) payable to the Company on account of calls or otherwise in respect of that share.

Subject to the Act, the Board may pay: (a) any fixed dividend at the prescribed rate which is expressed to be payable on fixed dates on the half-year or other dates; or (b) interim dividends on shares of any class, provided in each case that it appears to the Board that such payments are justified by the profits of the Company available for distribution. Provided the Directors act in good faith, they will not incur any liability to the holders of any shares for any loss they may suffer by the lawful payment, on any other class of shares having rights ranking after or pari passu with those shares, of any fixed or interim dividend.

The Board may, if authorised by an ordinary resolution of the Company:

(a) direct payment of a dividend in whole or in part by the distribution of specific assets (including in particular paid-up shares or debentures of any other company); and/or

(b) offer to ordinary shareholders the right to elect to receive ordinary shares, credited as fully paid, by way of scrip dividend instead of cash in respect of the whole (or part thereof) of all or any dividend.

No dividend or other moneys payable on or in respect of a share will bear interest against the Company. Any dividend which has remained unclaimed for six years from the date when it was declared will be forfeited and cease to remain owing by the Company. All unclaimed dividends, interest or other sums payable may be invested or otherwise used for the benefit of the Company as the Board may determine.

139 Voting rights

Every Shareholder who is present in person or every corporate representative present who has been duly authorised by a corporation will, on a vote on a show of hands, have one vote and on a poll every Shareholder present in person or by representative or proxy will have one vote for every New Share in the capital of the Company held by them.

In the case of joint holders, the vote of the senior who tenders a vote will be accepted to the exclusion of the votes of the other joint holders, and seniority will be determined by the order in which the names of the holders stand in the register of members.

Restrictions

No Shareholder will have the right to vote at any general meeting or at any separate meeting of the holders of any class of shares, or exercise any other right conferred by membership at any general meeting or at any separate meeting of the holders of any class of shares, either in person or by proxy, in respect of any share held by them unless all amounts presently payable by them in respect of that share have been paid.

If any member, or any other person appearing to be interested in shares held by such member, has been duly served with a notice under section 793 of the Act and is in default for the prescribed period in supplying to Mitchells & Butlers the information thereby required, then (unless the Board otherwise determines) in respect of the shares in relation to which the default occurred and any other shares held by the member, the member will not be entitled (for so long as the default continues) to attend or vote either personally or by proxy at a general meeting or at a separate meeting of the holders of that class of shares or to exercise any other right conferred by membership in relation to general meetings or separate meetings of the holders of any class of shares of the Company.

Pre-emption rights

There are no pre-emption rights under the Articles in respect of transfers of Shares. In certain circumstances Shareholders may have statutory pre-emption rights as provided for by the Act (save to the extent not previously disapplied by Shareholders). These statutory pre-emption rights would require the Company to offer new shares for allotment for cash to existing Shareholders on a pro rata basis before allotting them to other persons. In such circumstances, the procedure for the exercise of such statutory pre-emption rights would be set out in the documentation by which such shares would be offered to Shareholders.

Capitalisation of reserves or profits

The Directors may, with the sanction of an ordinary resolution of the Company, capitalise any sum standing to the credit of any of the Company’s reserve accounts or any sum standing to the credit of the Company’s profit and loss account, in each case provided such sum is not required for paying any preferential dividend (whether or not available for distribution). The Directors will appropriate the capitalised sum to the holders of Shares proportionately in accordance with their shareholdings in the form of an allotment of fully paid up bonus shares.

Return of capital

On a return of capital on winding up or otherwise, after paying such sums as may be due in priority to holders of any other class of shares in the capital of the Company, any further such amount will be paid to the holders of ordinary shares rateably in accordance with their shareholdings (taking into account the amounts paid up or credited as paid up in respect of each ordinary share they hold).

A liquidator may, with the authority of a special resolution and any other sanction required by the Insolvency Act 1986, divide among the members in specie or kind the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division will be carried out as between the members or different classes of members. The liquidator may also, with the corresponding authority, vest any part of the assets in trustees upon such trusts for the benefit of the members.

Variation of rights

Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any class of shares may be varied or abrogated with the written consent of the holders of three-

140 quarters in nominal value of the issued shares of the class, or the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class.

Transfer of shares

The Board may permit the holding of shares in any class of shares in uncertificated form and the transfer of title to shares in that class by means of a relevant system.

A member may transfer all or any of his certificated shares by an instrument of transfer in any usual form or in any other form which the Board may approve.

The Board may, in its absolute discretion, refuse to register the transfer of a certificated share unless the instrument of transfer:

- is lodged, duly stamped (if stampable), at the location where the Company’s register is held or at another place appointed by the Board accompanied by the certificate for the share to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; - is in respect of one class of share only; and - is in favour of not more than four transferees, provided that such discretion must not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis.

5. Directors and senior managers

5.1 Directors

The Directors of the Company as at the date of this document are listed below.

Name Age Position Bob Ivell ...... 68 Non-Executive Chairman Phil Urban ...... 58 Chief Executive Officer Tim Jones ...... 57 Chief Financial Officer Ron Robson ...... 57 Deputy Chairman and Non-Executive Director Susan Murray ...... 64 Senior Independent Director Keith Browne ...... 52 Non-Executive Director Dave Coplin ...... 50 Independent Non-Executive Director Eddie Irwin ...... 61 Non-Executive Director Josh Levy ...... 31 Non-Executive Director Jane Moriarty ...... 56 Independent Non-Executive Director Colin Rutherford ...... 62 Independent Non-Executive Director Imelda Walsh ...... 57 Independent Non-Executive Director Each of the Director’s business address is the Company’s registered office address at 27 Fleet Street, Birmingham, B3 1JP.

Bob Ivell, Non-Executive Chairman

Appointed to the Board in May 2011, Bob Ivell has over 40 years of extensive food and beverage experience with a particular focus on food-led, managed restaurants, pubs and hotels. He is currently a Non-Executive Director of Charles Wells Limited and a UK Board member of UK Hospitality. He was previously Senior Independent Director of AGA Rangemaster Group plc and Britvic plc, and a main Board Director of S&N plc as Chairman and Managing Director of its Scottish & Newcastle retail division. He has also been Chairman of Carpetright plc, Regent Inns, Park Resorts and David Lloyd Leisure Limited, and was Managing Director of Beefeater Restaurants, one of Whitbread’s pub restaurant brands, and a Director of The Restaurant Group. Mr Ivell is Chair of the Nomination Committee, the Pensions Committee, the Market Disclosure Committee and the Corporate Responsibility Committee.

141 Phil Urban, Chief Executive Officer

Phil Urban joined Mitchells & Butlers in January 2015 as Chief Operating Officer and became Chief Executive in September 2015. Mr Urban was previously Managing Director at Grosvenor Casinos, a division of Rank Group and Chairman of the National Casino Forum. Prior to that, he was Managing Director for Whitbread’s Pub Restaurant division, and for Scottish & Newcastle Retail’s Restaurants and Accommodation Division. Mr Urban has an MBA and is a qualified management accountant (CIMA).

Tim Jones, Chief Financial Officer

Tim Jones was appointed Chief Financial Officer in October 2010. Prior to joining the Company, he held the position of Group Finance Director for Interserve plc, a support services group. Previously, he was Director of Financial Operations at Novar plc and held senior financial roles both in the UK and overseas in the logistics company, Exel plc. Mr Jones was a Non-Executive Director of Poundland Group plc from October 2014 to September 2016. Mr Jones is a member of the Institute of Chartered Accountants in England and Wales and obtained an MA in Economics at Cambridge University.

Ron Robson, Deputy Chairman and Non-Executive Director

Ron Robson was appointed a Non-Executive Director in January 2010. He is Group Executive Director and Chief Financial Officer of Clyde Munro Group, a Non-Executive Director of Tottenham Hotspur Limited and a Non-Executive Director of This Is Remarkable Limited. He was previously Chief Executive of Ultimate Finance Group and, prior to that Chief Financial Officer of Tamar Capital Partners and Group Finance Director of Kenmore, both property investment and management groups. From 2005 to 2008 he was Group Finance Director of The Belhaven Group, a listed pub retailing, brewing and drink distribution group. Mr. Robson has held a number of senior finance roles and trained as a chartered accountant with Arthur Andersen. Mr. Robson is a nominated shareholder representative of Piedmont Inc. (a member of the Odyzean Group and a significant shareholder of the Company).

Susan Murray, Senior Independent Director

Susan Murray was appointed as Senior Independent Director in March 2019. She has served on the boards of Compass Group plc, Pernod Ricard SA, Imperial Brands plc, Wm Morrison Supermarkets plc and EI Group plc and is a former Council Member of the Advertising Standards Authority. She is currently a non-executive director and Chair of the Remuneration Committee of Hays plc and Grafton Group plc and a member of the supervisory board of William Grant & Sons Holdings Limited. In her executive career, amongst other roles, she was Director of International Marketing of Grand Metropolitan’s IDV business, Worldwide President and Chief Executive of Smirnoff’s vodka business and subsequently Chief Executive of Littlewoods.

Keith Browne, Non-Executive Director

Keith Browne was appointed as a Non-Executive Director in September 2016. He is a nominated shareholder representative of Elpida Group Limited (a member of the Odyzean Group and a significant shareholder of the Company). He is a non-executive director of Grove Limited, the holding company of Barchester Healthcare Limited. Mr Browne obtained a Bachelor of Commerce Degree from University College Dublin, qualified as a chartered accountant in 1994 and subsequently gained an MBA from University College Dublin. After joining KPMG Corporate Finance in 1996, he became a partner in the firm in 2001 and Head of Corporate Finance in 2009. He retired from the partnership to operate as an Independent Consultant in 2011.

Dave Coplin, Independent Non-Executive Director

Dave Coplin was appointed as an independent Non-Executive Director in February 2016. He is the CEO and founder of The Envisioners Limited and was formerly the Chief Envisioning Officer for Microsoft Limited, and is an established thought leader in the role of technology in our personal and professional lives. For over 25 years, he has worked across a range of industries and customer marketplaces, providing strategic advice and guidance around the role and optimisation of technology in the modern society both inside and outside of the world of work. Mr Coplin is also a Non-Executive Director of Pensions and Lifetime Savings Association as well as the Vianet Group plc.

142 Eddie Irwin, Non-Executive Director

Eddie Irwin was appointed as a Non-Executive Director in March 2012. He is a nominated shareholder representative of Elpida Group Limited (a member of the Odyzean Group and a significant shareholder of the Company). Mr Irwin is Finance Director of Coolmore, a leading thoroughbred bloodstock breeder with operations in Ireland, the USA and Australia and a Non-Executive Director of Grove Limited, the holding company of Barchester Healthcare Limited. He graduated from University College Dublin with a Bachelor of Commerce Degree and he is a Fellow of both the Association of Chartered Certified Accountants and the Chartered Governance Institute.

Josh Levy, Non-Executive Director

Josh Levy was appointed a Non-Executive Director in November 2015. Mr Levy is a nominated shareholder representative of Piedmont Inc. (a member of the Odyzean Group and a significant shareholder of the Company). He is Chief Executive of Ultimate Finance Group, Chairman of Avenue Insurance and a Director of Tavistock Group. Mr Levy previously worked in the Investment Banking Division of Investec Bank and holds an MSc and a BA (Hons) from the University of Nottingham.

Jane Moriarty, Independent Non-Executive Director

Jane Moriarty was appointed as an independent Non-Executive Director in February 2019. She is a Fellow of the Institute of Chartered Accountants in Ireland, and currently a Director of NG Bailey Group Limited, Quarto Group Inc., Martin’s Investments Limited and Nyrstar NV. She was previously a senior advisory partner with KPMG LLP.

Colin Rutherford, Independent Non-Executive Director

Colin Rutherford was appointed as an independent Non-Executive Director in April 2013. He is currently Chairman of Brookgate Limited. He is also a Non-Executive Director of NewRiver REITplc and U.S. based Evofem Biosciences Inc., amongst his other activities. He was also formerly Executive Chairman of MAM Funds plc and Euro Sales Finance plc. For over 30 years, Mr Rutherford has served as chairman, director or corporate adviser to various other public and private companies in the UK and overseas, and he has directly relevant experience in the hospitality and leisure sector. He has been a member of the Institute of Chartered Accountants of Scotland since 1983. Mr Rutherford is Chairman of the Audit Committee, and serves on all other independent governance committees.

Imelda Walsh, Independent Non-Executive Director

Imelda Walsh was appointed as an independent Non-Executive Director in April 2013. She was a Non- Executive Director and Chair of the Remuneration Committee, of Aston Martin Lagonda Global Holdings plc from 2018 to 2020, First Group plc from 2014 to 2020, William Hill plc from 2011 to 2018, Mothercare plc from 2013 to 2016 and Sainsbury’s Bank plc from 2006 to 2010. She has held senior executive roles at J Sainsbury plc, where she was Group HR Director from March 2004 to July 2010, Barclays Bank PLC and Coca-Cola & Schweppes Beverages Limited. She is Chair of the Remuneration Committee.

Set out below are the directorships and partnerships held by the Directors (other than, where applicable, directorships held in the Company or subsidiaries of the Company), in the five years prior to the date of this document:

Name Current directorships / partnerships Past directorships / partnerships

Bob Ivell ...... - Charles Wells, Limited - Carpetright Limited - UK Hospitality - Britvic plc Phil Urban ...... - N/A - N/A Tim Jones ...... - N/A - Poundland Group plc Ron Robson ...... - Tottenham Hotspur Limited - Ultimate Factors Limited - This is Remarkable Limited - Bizhelp24 Limited - Beatty Topco Limited - Bentley Park (UK) Limited - Clyde DH Limited - Ultimate Finance Holdings Limited - Clyde Munro Group Limited

143 Name Current directorships / partnerships Past directorships / partnerships

- Clyde Munro Limited - Ultimate Construction Finance - Clyde Munro Trustees Limited Limited - Muirhead Dental Care Limited - Ultimate Asset Finance Limited - Clyde Dental Practice Limited - Ultimate Finance Limited - PM & AM Limited - Ultimate Trade Finance Limited - Dollar Dental Care Limited - Ashley Finance Limited - Tomorrow Healthcare Limited - Ultimate Bridging Finance Limited - Uddingston Dental Care Limited - Ultimate Business Finance Limited - Dental Care Perth Limited - Ultimate Finance Group Limited - Nanodent Limited - Ultimate Accelerated Payments - Toothdoctor Larkhall Limited Limited - M&S Dental Care Limited - Renovo Ltd - Dysons Sales Ledger Management Services Limited - Avenue Insurance Partners Limited - Roscoe Capital Limited - International Turf Club Limited - Mayfair Capital Investments UK Limited - Roscoe Capital Dundee Limited - Sportingwins Limited - Timeweave Limited - Timeweave Washosp Limited Susan Murray . . . . . - William Grant & Sons Holdings - Boparan Holdings Limited Limited - Compas Group plc - Hays plc - William Grant & Sons Group Ltd - Grafton Group plc Keith Browne . . . . . - Grove Limited - Roundwood (Finance) Limited - Silvercert (Unlimited) (dissolved) Dave Coplin ...... - Pensions and Lifetime Savings - N/A Association - Vianet Group plc - The Envisioners Limited Eddie Irwin ...... - Macquarie Unlimited Company - Roundwood (Finance) Limited - Grove Limited (dissolved) - Carradale Trading Co. Limited - Curragh Racecourse Limited - Galzant Unlimited Company - Rockhart Trading Limited - Roncon Unlimited Company - Silvercon Unlimited Company - Sulzano Limited - Torrisdale Trading Co. Limited - Venega Unlimited Company - Cushlin Enterprises Unlimited - Denbury Unlimited - Drumchapel Enterprises Unlimited - Coolmore Stud Pty. Ltd Josh Levy ...... - Ultimate Finance Group Limited - N/A - Dysons Sales Ledger Management Services Limited - Avenue Insurance Partners Limited - Tudor Street Opco Limited

144 Name Current directorships / partnerships Past directorships / partnerships

- Bentley Park (UK) Limited - Timeweave Limited - Mayfair Capital Investments UK Limited Jane Moriarty ...... - NG Bailey Group Limited - Martin’s Investments Limited - Quarto Group Inc - Nyrstar NV Colin Rutherford . . . . - Ajenta Limited - Walton Funds Advisors LLP - Money Redress Limited - Mackays Stores Group Limited - Rothley Holdings Limited - Susan Metcalfe Limited - Newriver Reit plc - Meridian Realisations Limited - Meallmore Limited - Renaissance Services SAOG - Teachers Media plc - Brookgate Limited - Malvern Leisure Limited - James Donaldson & Sons Limited - Evofem Biosciences Inc. Imelda Walsh ...... - N/A - Aston Martin Lagonda Global Holdings plc - First Group plc - William Hill plc - Mothercare plc 5.2 Senior management

The Group’s senior management are as follows:

Name Age Position Phil Urban ...... 58 Chief Executive Officer Tim Jones ...... 57 Chief Financial Officer Chris Hopkins ...... 55 Group Commercial and Marketing Director Susan Martindale ...... 59 Group Human Resources Director Gary John ...... 56 Group Property Director Greg McMahon ...... 60 Company Secretary and General Counsel Susan Chappell ...... 53 Divisional Director: City Division Dennis Deare ...... 60 Divisional Director: Premium Division David Gallacher ...... 53 Divisional Director: Restaurant Division Each Senior Manager’s business address is the Company’s registered office address at 27 Fleet Street, Birmingham, B3 1JP.

See paragraph 5.1 of this Part X for biographies of Phil Urban and Tim Jones, as well as the directorships and partnerships held by them in the five years prior to the date of this document.

Chris Hopkins, Group Commercial and Marketing Director

Chris Hopkins was appointed Commercial Director in January 2016. He has over 20 years’ experience in the leisure and retail industry, with previous roles including Commercial & Marketing Director, Grosvenor Casinos (The Rank Group) and Commercial Director at Arriva. Before that Mr Hopkins held senior marketing and operational roles with Scottish & Newcastle, Whitbread and Deliverance working across well-known brands such as Beefeater, Brewers Fayre and Chef & Brewer. Mr. Hopkins is a director of 3Sixty Restaurants Limited.

Susan Martindale, Group Human Resources Director

Susan Martindale was appointed Group HR Director in November 2012 and has over 30 years’ experience in the leisure and retail sector. She originally joined the Bass plc graduate programme and held a number of

145 marketing and supply chain roles across the Group before leaving the Company in 1998 to join Marston’s as Group Purchasing Director. In late 2000, she returned to Six Continents as Retail Operations Director and has held various operations roles including Brand Operations Director for All Bar One and Divisional Director for the High St and Restaurant Division as well as leading Mitchells & Butlers’ business transformation programme. She was a director of Mitchells & Butlers Pension Trustee Holdings Limited from September 2014 to July 2016 and a director of Mitchells & Butlers Pensions Limited from November 2012 to July 2016. She is currently a director of Mitchells & Butlers Trust Funds Limited and Mitchells & Butlers Welfare Funds Limited.

Gary John, Group Property Director

Gary John was appointed Group Property Director in November 2010. Prior to joining Mitchells & Butlers, he was Senior Vice President, International Development, Estates and Franchising with Burger King Corporation, a position he held since 2004. Before that Mr John held senior property roles with Gap, Inc., Vue Entertainment and the Walt Disney Company. He is a Fellow of the Royal Institution of Chartered Surveyors. Mr. John is a director of Denim Library Limited and the Fatboy Pub Company Limited and from 2015 to 2019 he was a director of Liberty Living Group plc.

Greg McMahon, Company Secretary and General Counsel

Greg McMahon was appointed Company Secretary and General Counsel in January 2013. He was previously at Wm Morrison Supermarkets plc where he was Company Secretary and Head of Legal Services. Mr McMahon is a solicitor who began his career in private practice before moving into in-house positions as Group Company Secretary and Head of Legal Services at Airtours plc/MyTravel Group plc, and at Thomas Cook Group plc following the merger of MyTravel and Thomas Cook AG, and then at Assura Group Limited. He was a director of AIM listed Frenkel Topping Group plc from February 2014 to June 2016 and a director of White Horse Insurance Ireland dac from 2008 to September 2019 and a director of Thomas Cook Travel Pensions Trustee Limited from April 2017 to September 2019 and a director of Mitchells & Butlers Trust Funds Limited from January 2013 to July 2016 and a director of Mitchells & Butlers Welfare Funds Limited from January 2013 to July 2016. Mr. McMahon is a director and secretary of Mayfield Consultancy Services Limited.

Susan Chappell, Divisional Director: City Division

Susan Chappell was appointed Divisional Director of City Division in March 2016 after 25 years with Mitchells & Butlers. She originally joined the graduate management scheme programme before progressing into various roles in both operations and marketing, including new concept development before moving into senior operations. She was Brand Operations Director for All Bar One, Browns and Miller & Carter. She now has responsibility for All Bar One, Browns, Nicholson’s, and the Castle pub portfolio. Susan has since attained a second BSc Hons degree in Nutritional Health.

Dennis Deare, Divisional Director: Premium Division

Dennis Deare was appointed Divisional Director of the Premium Division in March 2016. He returned to Mitchells & Butlers in 2004 and has held a number of key roles including Brand Operations Director and Director of Food Trading, responsible for food procurement through to menu creation. Previously Mr Deare held leadership roles with Scottish & Newcastle and in his first period with Mitchells & Butlers held operations and marketing roles, along with working in new concept operations where he supported the creation of All Bar One and O’Neill’s. He started his career in accountancy and as general manager of bars and restaurants.

David Gallacher, Divisional Director: Restaurant Division

David Gallacher was appointed Divisional Director of the Restaurant Division in September 2019 after 14 years with Mitchells & Butlers across two spells. Previously Director of Food Trading, David has worked for Mitchells & Butlers across a variety of roles. Mr Gallacher first joined the company as a graduate and developed a successful career before leaving to hold senior operational and commercial roles at Whitbread, Aramark and Pizza Hut. He returned to Mitchells & Butlers in 2013 and was critical in developing the company’s Food Trading function. Mr Gallacher is responsible for the Restaurant Division, specifically the Harvester, Toby Carvery and Stonehouse brands. He is a director of Mitchells & Butlers Trust Funds Limited and Mitchells & Butlers Welfare Funds Limited.

146 Save as set out in paragraph 5.1 of this Part X, in the five years prior to the date of this document, no Senior Manager (other than, where applicable, directorships held in the Company or subsidiaries of the Company) has held any directorships or partnerships.

There is no family relationship between any of the Company’s Directors or the Senior Managers.

5.3 As at the date of this document, none of the Directors or the Senior Managers has at any time within the past five years:

(a) save as disclosed in paragraphs 5.1 and 5.2 of this Part X, been a director or partner of any companies or partnerships; or

(b) had any convictions in relation to fraudulent offences (whether spent or unspent); or

(d) has been partner of any partnership at the time of or within a 12-month period preceding any compulsory liquidation, administration or partnership voluntary arrangement of such partnership; or

(e) been partner of any partnership at the time of or within a 12-month period preceding any compulsory liquidation, administration or partnership voluntary arrangement of such partnership; or

(f) had his or her assets be the subject of any receivership; or

(g) been partner of any partnership at the time of or within a 12-month period preceding any assets thereof being the subject of a receivership; or

(h) been subject to any official public incrimination and/or sanctions by any statutory or regulatory authority (including any designated professional body); or

(i) ever been disqualified by a court from acting as a director or other officer of any company or from acting in the management or conduct of the affairs of any company.

5.4 Save as set out below, and save for their capacities as persons legally and beneficially interested in Shares, there are:

(a) no potential conflicts of interest between any duties carried out on behalf of the Company by Directors or the Senior Managers and their private interests and/or other duties; and

(b) no arrangements or understandings with major Shareholders, customers, suppliers or others, pursuant to which any Director or Senior Manager was selected.

Two members of the Odyzean Group, Piedmont Inc. and Elpida Group Limited, each have two nominated representatives on the Board. Piedmont’s appointment rights are formalised in an appointment deed which it and the Company entered into on 15 July 2009 (the Appointment Deed). Under the Appointment Deed, Piedmont has the right to appoint: (i) one director to the Board for as long as it holds between 16 and 22 per cent. of the Shares; or (ii) two directors to the Board for as long as it holds 22 per cent. or more of the Shares (each such Director, a Piedmont Director). These thresholds are subject to adjustment in the case of the occurrence of certain dilution events. To the extent Piedmont ceases to hold the requisite number of Shares to appoint such director, each Piedmont Director is required to resign immediately. For as long as Piedmont holds 16 per cent. of the Shares, the Appointment Deed also entitles it to appoint a Piedmont Director: (A) to be a member of the Nomination Committee; and (B) to attend, and receive all papers relating to, meetings of the Remuneration Committee. The currently appointed Piedmont Directors are Ron Robson and Josh Levy. There is no equivalent agreement in place between the Company and Elpida. The currently appointed Elpida Directors are Keith Browne and Eddie Irwin.

5.5 Corporate governance

For a description of the Group’s corporate governance arrangements, including the structure of the Board, see the “Corporate Governance Statement” in the Group’s FY2020 Annual Report, incorporated into this document as described in Part XI – Documentation Incorporated by Reference.

147 5.6 Directors’ interests in the Company

The interests of the Directors in the share capital of the Company (all of which, unless otherwise indicated, are beneficial) on 19 February 2021 (being the latest practicable date prior to the publication of this document) and as they are expected to be immediately following the Open Offer, including as a percentage of the Enlarged Share Capital, assuming full take up by the Directors of their entitlements under the Open Offer, are as follows:

Shares beneficially Shares beneficially held held at 19 immediately following February 2021 the Open Offer Name No. % No. % Bob Ivell ...... 12,006 0.003% 16,675 0.003% Phil Urban ...... 241,608 0.056% 335,567 0.056% Tim Jones ...... 178,990 0.042% 248,597 0.042% Ron Robson ...... — — — — Susan Murray ...... — — — — Keith Browne ...... — — — — Dave Coplin ...... 2,042 0.000% 2,836 0.000% Eddie Irwin ...... 31,560 0.007% 43,833 0.007% Josh Levy ...... — — — — Jane Moriarty ...... — — — — Colin Rutherford ...... — — — — Imelda Walsh ...... 7,500 0.002% 10,417 0.002% The Directors and Senior Managers have the same voting rights as all other Shareholders.

In addition to the interests noted above, certain Directors have further interests as a result of awards and grants made pursuant to Mitchells & Butlers’ Performance Restricted Share Plan (PRSP), Sharesave Plan (SAYE), Share Incentive Plan and Short Term Deferred Incentive Plan (STDIP) (described in Note 4.6 of the FY20 Financial Statements, which are incorporated by reference into this document) (the Share Schemes), as at the latest practicable date prior to the publication of this document. These are set out below.

Number of ordinary shares under Earliest option as at exercising/vesting 26 September Name Scheme/grant Date of grant date Expiry 2020 Phil Urban ...... PRSP 2017/2019(1) Nov 2016 Nov 2019 Nov 2021 - PRSP 2018/2020(2) July 2018 Nov 2020 Nov 2022 393,517 PRSP 2019/2021(2) Nov 2018 Nov 2021 Nov 2021 375,000 PRSP 2020/2022(2) Nov 2019 Nov 2022 Nov 2024 228,320 STDIP 2017 Dec 2017 Dec 2018(3) Dec 2019 - STDIP 2018 Dec 2018 Dec 2019(3) Dec 2020 18,494 STDIP 2019 Dec 2019 Dec 2020 Dec 2021 46,965 SAYE 2018 June 2018 Oct 2021 Mar 2022 7,317 Total 1,069,613 Tim Jones ...... PRSP 2017/2019(1) Nov 2016 Nov 2019 Nov 2021 - PRSP 2018/2020(2) July 2018 Nov 2020 Nov 2022 230,361 PRSP 2019/2021(2) Nov 2018 Nov 2021 Nov 2023 219,521 PRSP 2020/2022(2) Nov 2019 Nov 2021 Nov 2024 133,698 STDIP 2017 Dec 2017 Dec 2018(3) Dec 2019 - STDIP 2018 Dec 2018 Dec 2019(3) Dec 2020 15,466 STDIP 2019 Dec 2019 Dec 2020(3) Dec 2021 39,285 SAYE 2018 June 2018 Oct 2021 Mar 2022 7,317 Total 645,648 Notes: (1) 50 per cent. of this PRSP award is subject to a total shareholder return condition and the other 50 per cent. is subject to adjusted earnings per share growth targets. (2) 75 per cent. of this PRSP award is subject to an operating cash flow target and the remaining 25 per cent. is subject to a total shareholder return condition. (3) Shares are released in two equal tranches, 12 and 24 months after grant. Date shown is first release date. The Non-Executive Directors (including the Chairman) do not have any non-beneficial interests in the Shares, subject to options and awards under the Share Schemes.

148 No Director has or has had any interest in any transactions which are or were unusual in their nature or conditions or are or were significant to the business of the Group or any of its subsidiary undertakings and which were effected by the Group or any of its subsidiaries during the current or immediately preceding financial year or during an earlier financial year and which remain in any respect outstanding or unperformed.

There are no outstanding loans or guarantees granted or provided by any member of the Group to or for the benefit of any of the Directors.

Save as set out in this Part X, it is not expected that any Director will have any interest in the share or loan capital of the Company following the Open Offer and there is no person to whom any capital of any member of the Group is under option or agreed conditionally or unconditionally to be put under option.

Save as disclosed in this paragraph 5, no Director or Senior Manager has any interests (beneficial or non- beneficial) in the share capital of the Company or any of its subsidiaries.

6. Interests of major Shareholders

Shares Name No. % Odyzean Limited(1) ...... 236,199,685 55.0% Standard Life Aberdeen plc ...... 24,398,876 5.7%

As a result of the establishment of Odyzean Limited, the Company is majority owned and controlled by the Odyzean Group.

None of the major Shareholders referred to above has different voting rights from other Shareholders.

Insofar as is known to the Company, immediately following the Open Offer, the interests of those persons set out above with an interest in 3.0 per cent. or more of the Company’s issued share capital, and the amount of such persons’ interests, including as a percentage of the Enlarged Share Capital (assuming full take up by such persons of their rights under the Open Offer and no options granted under the Share Schemes are exercised between 19 February 2021 (being the latest practicable date prior to the publication of this document) and the completion of the Open Offer), will be as follows:

Shares Name No. % Odyzean Limited(1) ...... 328,055,115 55.0% Standard Life Aberdeen plc ...... 33,887,328 5.7%

Notes: (1) The Odyzean Group has irrevocably undertaken to take up all of its rights to subscribe for New Shares in the Open Offer and to take up all additional Shares made available and allocated to it under the Excess Application Facility. If no other Qualifying Shareholders apply to subscribe for their Open Offer Entitlements and, therefore members of the Odyzean Group are the only Shareholders that take up New Shares pursuant to the Open Offer, the shareholding of the Odyzean Group will increase to 67.6 per cent. of the Company’s Enlarged Share Capital.

Future arrangements with the Odyzean Group

149 Board, which may result in fewer independent Non-Executive Directors and less focus on compliance with the UK Corporate Governance Code recommendations in the future. In particular, the Odyzean Group has indicated that it will disregard specific corporate governance expectations around tenure and that it expects the Board to focus on retaining and acquiring skillsets amongst the independent Non-Executive Directors that are required to optimise the development of the business going forward. The Odyzean Group has also indicated that the time and cost devoted by the senior management team to public company matters should be reduced.

As a result of the Odyzean Group holding over 30 per cent. of the Company’s shares, the Odyzean Group is considered to be a controlling shareholder for the purposes of the Listing Rules. The Company has requested that the Odyzean Group enters into a relationship agreement with the Company in compliance with the Listing Rules, which the Company has six months to put in place from the time at which the Odyzean Group became a controlling shareholder. A relationship agreement requires a controlling shareholder to: (a) only enter into transactions and arrangements with the company on an arm’s length basis and on normal commercial terms; (b) ensure it and its associates do not take any action which would prevent the company from complying with its obligations under the Listing Rules; and (c) not propose, and ensure its associates do not propose, any shareholder resolution which is intended to circumvent the proper application of the Listing Rules. If the Odyzean Group does not enter into a relationship agreement with the Company during such six month period, the Company will be required to disclose this in its annual report and any transactions entered into between the Company and members of the Odyzean Group will not be subject to certain exemptions from the related party rules set out in the Listing Rules. The Company would expect such enhanced oversight measures to apply until a relationship agreement was entered into. The Company may need to consider a transfer of its listing category from a premium listing to a standard listing if a relationship agreement that satisfies the Listing Rules is not entered into with Odyzean Limited, and potentially its owners, within six months of them having become controlling shareholders. If the Company moved to a standard listing this may have adverse consequences for the Company and its shareholders, such as exclusion from certain of the FTSE indices for listed shares.

7. Directors’ remuneration

For a description of the Company’s current remuneration policy and the remuneration paid (including any contingent or deferred compensation), and benefits in kind granted to Directors of the Company for services in all capacities to the Group, see the “Report on the Directors’ Remuneration” in the Group’s FY2020 Annual Report, incorporated into this document as described in Part XI—Documentation Incorporated by Reference.

150 The Company is proposing to submit a new remuneration policy for approval by shareholders at the Company’s next Annual General Meeting on 24 March 2021. Major Shareholders and proxy agencies have been consulted on the proposed new policy. The final details of the proposed policy will be disclosed in the notice of the Annual General Meeting.

The principal changes in the proposed new policy are expected to consist of:

(a) Restricted share plan – it is proposed to replace the existing, long-term incentive plan (known as the Performance Restricted Share Plan) with a Restricted Share Plan (the RSP);

(b) Pension contributions – the Company wishes to align the company pension contributions for new executive directors with the wider workforce pension contribution rates and align company pension contributions for existing executive directors by no later than the end of FY23/FY24;

(d) Post-cessation shareholding requirements – it is also proposed that the Company will introduce a post-cessation shareholding requirement (PCSR) for all executive directors; and

(e) Malus and clawback provisions – the existing malus and clawback trigger events are proposed to be extended to include: (i) conduct by an individual resulting in reputational damage; and (ii) corporate failure.

151 No other material changes to the current remuneration policy, including the annual performance bonus, are proposed, although Shareholders should note the statements regarding future management team incentivisation referred to above. The resultant proposed new remuneration policy is summarised in the table below:

Changes from current Element Proposed policy policy Base salary • Generally increases are to be in line with the wider No changes proposed workforce. Annual bonus • Normal maximum of 100 per cent. of salary, No changes proposed exceptional maximum of 150 per cent. of salary. • At least 50 per cent. of performance conditions to be based on financial measures, the remainder based on non-financial or personal business objectives. • 50 per cent. of the award to be deferred as shares and released in two equal tranches, after 12 and 24 months. RSP • Normal maximum of 100 per cent. of salary, Replaces LTIP exceptional maximum of 125 per cent. of salary. • No performance measures, but performance underpins applied at the discretion of the Remuneration Committee on vesting. • Vesting after three years, with a two-year holding period post-vesting. Pension (or cash • New executive directors to be aligned with the Alignment of pension allowance wider workforce pension rate (currently 4 per cent. contributions for new of salary). executive • Current executive directors’ contributions (currently directors; current executive 14.2 per cent. of salary) to be reduced by no later directors to be aligned over than the end of FY23/FY24 (a process which time commenced in FY20). Shareholding • CEO shareholding requirement of 250 per cent. of Increased requirement for requirement salary. all executive directors • All other executive directors shareholding requirement of 200 per cent. of salary. Post-cessation • All executive directors required to maintain New requirement introduced shareholding shareholding requirements for two years post- for all executive directors requirement cessation.

Additional details on the RSP

- Quantum - The proposed RSP award will have a normal maximum award level of shares equal in value to 100 per cent. of salary and an exceptional maximum award level of 125 per cent. of salary, which is, in effect, a 50 per cent. reduction when compared to the existing LTIP award.

- Underpins - the Committee will take into account the following factors (amongst others) when determining whether to exercise its discretion to adjust the number of shares vesting:

• If any adjustments have been made to annual bonus outcomes for each of the three years covered by the vesting period for the restricted shares. The Remuneration Committee undertakes a thorough ‘quality of earnings’ assessment prior to the finalisation of any annual bonus outcomes and such an assessment will also be a factor in any final approval by the Remuneration Committee of the vesting of restricted shares. This annual quality of earnings assessment takes into account financial performance as well as customer experience and employee engagement (currently part of the annual bonus plan), along with a broader assessment of business performance and KPIs;

152 • Whether there has been material damage to the reputation of the Company (in such circumstances, responsibility and hence any adjustments to the level of vesting may be allocated collectively or individually to participants); and

• That the business has a stable and appropriate capital structure in place following the cessation of restrictions on trade due to the COVID-19 pandemic that enables the recovery of the business and execution of the Group’s strategic priorities.

The Remuneration Committee considers these underpins will ensure any vesting under the RSP is appropriate in the context of wider business performance.

8. Auditors

The FY20 Financial Statements have been audited by Deloitte LLP, independent auditor, with its address at 1 New Street Square, London, EC4A 3HQ, as stated in its report appearing herein. Deloitte LLP is a member firm of the Institute of Chartered Accountants in England and Wales.

9. Open Offer arrangements 9.1 Underwriting Agreement

On 22 February 2021, the Company and the Underwriters entered into the Underwriting Agreement pursuant to which the Company has appointed Morgan Stanley as Sponsor and Global Co-ordinator, and Morgan Stanley, HSBC and Santander as Joint Bookrunners and Underwriters, in connection with the Open Offer and Admission.

Subject to and pursuant to the terms and conditions of the Underwriting Agreement, the Underwriters have agreed to subscribe for any Excess Shares not taken up in the Open Offer. However, if the Odyzean Group should fail to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Global Coordinator will be entitled to terminate the obligations of the Underwriters under the Underwriting Agreement. As the Odyzean Group has undertaken to subscribe for any New Shares, including Excess Shares that are made available and allocated to it under the Excess Application Facility, the Open Offer is fully underwritten.

The aggregate amount of fees and commission payable to the Underwriters in respect of the Open Offer are approximately £4.5 million.

Irrespective of whether Admission occurs, the Company shall bear all expenses of or incidental to the Open Offer, Admission and the arrangements contemplated by the Underwriting Agreement, including the fees and expenses of its professional advisers, the properly incurred and documented expenses of the Underwriters and the properly incurred and documented fees and expenses of their professional advisers, the cost of preparation, advertising, printing and distribution of this document and all other documents connected with the Open Offer, all bookbuilding expenses, the Registrar’s fees, all filing fees and related and other expenses in connection with the Open Offer and, where applicable, VAT.

The Company has given certain customary representations, warranties and undertakings to the Underwriters, and customary indemnities to the Underwriters and to certain persons connected with them, in relation to the Open Offer. The obligations of the Underwriters under the Underwriting Agreement are subject to Admission occurring at or before 8.00 a.m. on 12 March 2021 (or such later time and/or date as the Global Co-ordinator and the Company may agree, being not later than 31 March 2021) and certain other customary conditions to be satisfied prior to Admission including, amongst others:

(a) the warranties being true, accurate and not misleading as at the date of the Underwriting Agreement, the date of this document, the date of any supplementary prospectus and Admission (in each case as though they had been given and made at such date or time by reference to the facts and circumstances then subsisting);

(b) the Company having complied with and not being in breach, at any time prior to Admission, of any of its obligations under the Underwriting Agreement or under the terms of the Open Offer which, in each case, fall to be performed before Admission, except for any breaches which the Global Co-ordinator considers (acting in good faith) not to be material in the context of the Open Offer, the underwriting of the New Shares or Admission;

153 (c) no event referred to in Article 23 of the UK Prospectus Regulation and/or Article 18 of the UK Prospectus RTS Regulation arising in the period between the time of publication of this document and the time of Admission and no supplementary prospectus being published by or on behalf of the Company before Admission, which the Global Co-ordinator considers (acting in good faith) to be material in the context of the Open Offer, the underwriting of the New Shares or Admission;

(d) the Odyzean Group subscribing for all New Shares pursuant to its Open Offer Entitlements and all Excess Shares made available and allocated to it under the Excess Application Facility;

(e) there having been no “material adverse change” at any time prior to Admission (in the opinion of the Global Co-ordinator (acting in good faith));

(f) the passing of the Resolutions (without amendment) at the General Meeting on 11 March 2021 (or such later date as the Global Co-ordinator and the Company may agree); and

(g) the Shareholder Undertaking continuing to have full force and effect and not having lapsed or having been varied, supplemented, rescinded or terminated prior to Admission.

If any of the conditions in the Underwriting Agreement are not satisfied (or, in respect of certain conditions, waived by the Global Co-ordinator), by the required time and date (or by such later time and/or date as the Global Co-ordinator may agree) then, save for certain exceptions, the obligations of the parties under the Underwriting Agreement shall cease and terminate without prejudice to any liability for any prior breach of the Underwriting Agreement.

In addition, the Global Co-ordinator is entitled to terminate the Underwriting Agreement in certain circumstances, including for material adverse change and force majeure, but only prior to Admission.

If the Underwriting Agreement is terminated in accordance with its terms, the Company will not seek Admission.

The Sponsor also has the right to terminate its obligations as sponsor if any matter arises which the Sponsor considers may adversely affect its ability to perform its functions under Chapter 8 of the Listing Rules or fulfil its obligations as sponsor in connection with the Open Offer and/or Admission. The termination by the Sponsor of its role as sponsor will not terminate any other provision of the Underwriting Agreement, which would remain in full force and effect.

The Company has undertaken that from the date of the Underwriting Agreement and the date falling 90 calendar days after Admission, it will not, without the prior written consent of the Global Co- ordinator: (i) allot, offer, issue (or contract to allot or issue), or directly or indirectly lend, sell, transfer, pledge, charge, grant any rights in respect of or security or an option or lien over Ordinary Shares, or enter into any other agreement or arrangement having a similar effect, or in any way, whether directly or indirectly, dispose of the legal title to or beneficial interest in Ordinary Shares, including any New Shares; or (ii) enter into any swap or other agreement, arrangement or transaction that transfers, confers or allots, in whole or in part, directly or indirectly, any of the economic consequences of the ownership of Ordinary Shares; or (iii) carry out any capital increases or issue any convertible bonds, exchangeable bonds or other securities which are convertible, exchangeable, exercisable into, or otherwise give the right to subscribe for or acquire Ordinary Shares, whether directly or indirectly, (whether any such swap, agreement, arrangement or transaction described in (i) or (ii) above is to be settled by delivery of Ordinary Shares, cash or otherwise); or (iv) make any announcement or other publication of the intention to do any of the foregoing or make any filing with respect thereto, provided that the above restrictions shall not apply to: (a) the issue and offer by or on behalf of the Company of the New Shares; and (b) the issue of any Ordinary Shares pursuant to the exercise of options under share option schemes in existence on the date of Admission and which are described in this document.

154 9.2 Shareholder Undertaking

The members of the Odyzean Group have entered into the Shareholder Undertaking, which sets out their commitments in respect of the Open Offer. Under the Shareholder Undertaking, the members of the Odyzean Group have committed to:

(a) vote in favour of the Resolutions to be proposed at the General Meeting; and

(b) subscribe for their pro rata entitlements under the Open Offer, and to subscribe for any Excess Shares made available and allocated to it through the Excess Application Facility.

The Shareholder Undertaking may be terminated by the Odyzean Group in certain circumstances, including if Admission of the New Shares has not become effective by 8.00 a.m. on 31 March 2021.

10. Material contracts

10.1 The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Company or another member of the Group within the two years immediately preceding and including the date of this document, and are, or may be, material or have been entered into at any time by the Company or any member of the Group and contain provisions under which the Company or any member of the Group has an obligation or entitlement which is, or may be, material to the Company or the Group as at the date of this document:

10.1.1 Open Offer arrangements

For a description of the principal terms of the Underwriting Agreement and the Shareholder Undertaking, see paragraphs 9.1 and 9.2 of this Part X.

10.1.2 Financing arrangements

(a) Existing Facilities

(i) Revolving Credit Facilities

On 20 September 2017, Mitchells & Butlers Retail (No. 2) Limited as borrower and the Company as guarantor (collectively, the Obligors) entered into bilateral revolving facility agreements with each of Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc as lenders. The facility agreements were each amended and restated pursuant to agreements dated 11 June 2020 (the RCF Agreements). As at 19 February 2021, being the latest practicable date prior to the publication of this document, the RCF Agreements were all fully drawn with £150 million outstanding.

Each RCF Agreement provides for borrowings up to an aggregate principal amount of £50 million on a committed basis. There is a requirement that the utilisations for each lender under Existing Facilities are equal (taking into account the RCF Agreements and 20 per cent. of the Term Agreements (as defined below)).

Maturity

The RCF Agreements each mature on 31 December 2021. All outstanding amounts under the RCF Agreements must be repaid in full on or prior to the maturity date.

Covenants

The RCF Agreements require the Obligors to comply, and to ensure the compliance by each other member of the Group which is not part of the WBS Group (the Unsecured Group), with a number of customary undertakings and covenants. These covenants include, among others, the following financial covenants:

- the Unsecured Group liquidity will not be less than the amount specified for each four-week testing date;

- the ratio of Unsecured Group EBITDAR to Net Rent Payable plus Unsecured Group Interest for the relevant half year period will not be less than the ratio specified for each quarterly testing date (increasing from 0.75x in April 2021 to 1.75x in September 2021);

155 - the ratio of Unsecured Group EBITDAR to Net Rent Payable plus Unsecured Group Interest for the relevant year will not be less than 1.0x from September 2021;

- the ratio of Unsecured Group Net Debt (as at each test date in and after September 2021) to Unsecured Group EBITDA (for the relevant period ending on the relevant test date) will not be more than 6x from September 2021.

Events of defaults

The RCF Agreements contain certain customary events of default (subject in certain cases to agreed grace periods, thresholds and other qualifications), including, for example, non-payment, breach of financial covenants and a cross-default to other financial indebtedness of any member of the Unsecured Group (i.e. not including the WBS Group). The occurrence of an event of default which is continuing would allow the lender under each RCF Agreement to, amongst other things, accelerate all or part of the outstanding loans, cancel the commitments and declare all or part of the loans payable on demand under the relevant RCF Agreement.

(ii) Term Facilities

On 11 June 2020, Mitchells & Butlers Retail (No. 2) Limited as borrower and the Company as guarantor (collectively, the Obligors) entered into bilateral term facility agreements (structured under the Government- backed Coronavirus Large Business Interruption Loan Scheme) with each of HSBC UK Bank plc and Santander UK plc as lenders (the Term Agreements). As at 19 February 2021, being the latest practicable date prior to the publication of this document, £100 million was outstanding under the Term Agreements.

Each Term Agreement provides for borrowings up to an aggregate principal amount of £50 million on a committed basis. The funds available under the Term Agreements have been drawn in full.

Maturity and repayment

The Term Agreements each mature on 31 December 2021 and all outstanding amounts must be repaid in full on that date.

The Company must apply: (A) any net proceeds from capital market issues; and (B) net disposal proceeds over £7.5 million, in each case as received by the Unsecured Group and after deducting any fees, expenses, costs and taxes, in prepayment of loans under the Term Agreements.

Covenants

The Term Agreements require the Obligors to comply, and to ensure the compliance by each other member of the Unsecured Group, with undertakings and covenants on substantially the same terms as the RCF Agreements.

Events of defaults

The Term Agreements contain events of default on substantially the same terms as the RCF Agreements.

(b) New Debt Package

On 14 February 2021, Mitchells & Butlers Retail (No. 2) Limited as borrower and the Company as guarantor (collectively, the Obligors) entered into a revolving facility agreement with each of Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc as lenders and HSBC Bank plc as facility agent (the New RCF Agreement).

The New RCF Agreement provides for borrowings up to an aggregate principal amount of £150 million on a committed basis. The funds are available to be drawn for the general corporate purposes and working capital requirements of the Group.

Conditions to utilisation

The Group must satisfy the conditions precedent to utilisation before the facility under the New RCF Agreement may be drawn. These include the Open Offer being completed by 31 May 2021 and prepayment and cancellation of the Refinanced Facilities in full.

156 On satisfaction of the conditions precedent, the Group is entitled to utilise the facility under the New RCF Agreements provided that no Default, or, in the case a rollover loan, no Event of Default, is continuing and that certain representations are true in all material respects as at the date of the proposed utilisation.

Maturity and repayment

The New RCF Agreement matures on the date falling three years after the date on which it was signed (being 19 February 2021). All outstanding amounts under the New RCF Agreement must be repaid in full on or prior to the maturity date. Subject to certain conditions and exceptions, loans under the New RCF Agreement may be borrowed, repaid and re-borrowed at any time during the availability period under the New RCF Agreement (being one month prior to the maturity date).

Interest rate and fees

Loans under the New RCF Agreement accrue interest at the percentage rate per annum equal to the aggregate of the margin and SONIA, with the margin linked to the ratio of Net Debt to EBITDA. Default interest is calculated as an additional 1 per cent. on the overdue amount.

A commitment fee applies at the rate of 40 per cent. of the then applicable margin, payable on the unused and uncancelled amount available from the lenders in respect of the New RCF Agreement. Utilisation fees are also payable on loans.

Guarantees

The Company has provided a continuing guarantee of punctual performance of each of the Obligors’ payment obligations under the New RCF Agreement and related finance documents.

Covenants

The New RCF Agreement requires the Obligors to comply, and to ensure the compliance by each other member of the Unsecured Group, with a number of customary undertakings and covenants, which are subject to customary materiality qualifications, exceptions and baskets. These covenants are more flexible (and less restrictive) for the Group than those contained the Existing Facilities and include, among others, the following financial covenants:

- the Unsecured Group liquidity will not be less than £50 million plus one half of the Santander CLBILS if outstanding for each financial period testing date up to and including July 2022;

- the ratio of Unsecured Group EBITDAR to Net Rent Payable plus Unsecured Group Interest will not be less than 1.5x for each half year testing date (first tested in September 2022);

- the ratio of Unsecured Group Net Debt to Unsecured Group EBITDA will not be more than 3x for each half year testing date (first tested in September 2022);

- The Unsecured Group liquidity will be tested on the last day of each financial year, financial half, financial quarter and 4-week financial period (from the date of the New RCF Agreement to the 2 July 2022 test date, at the latest). The other financial covenants will be tested at each financial half year (from the test date in September 2022, unless the Company elects to test earlier).

Events of defaults

The New RCF Agreement contains certain customary events of default (subject in certain cases to agreed grace periods, thresholds and other qualifications), including, non-payment, breach of financial covenants, breach of other obligations, misrepresentation, a cross-default to other financial indebtedness of any member of the Unsecured Group, insolvency and insolvency proceedings, creditors’ process, ownership of the borrower, unlawfulness, repudiation and cessation of business. The occurrence of an event of default which is continuing would allow the agent under the New RCF Agreement to, amongst other things, accelerate all or part of the outstanding loans, cancel the commitments and declare all or part of the loans payable on demand under the New RCF Agreement.

157 Mitchells & Butlers Retail Holdings Limited (the WBS Group Parent) and its subsidiary, Mitchells & Butlers Retail Limited (the Borrower, and together with the WBS Group Parent, the WBS Group) established, in November 2003, a secured corporate debt financing structure (the WBS). Pursuant to the WBS, Mitchells & Butlers Finance plc (the Issuer) was incorporated to issue secured notes, the proceeds of which were on-lent to the Borrower. As at 19 February 2021, being the latest practicable date prior to the publication of this document, £1,578 million principal was outstanding under the WBS Financing.

The Borrower is the principal company of the WBS Estate (as defined below) and its principal source of income is revenue generated by the restaurants, pubs and bars comprising the WBS Estate.

On 13 November 2003 (the Original Closing Date), the Issuer issued several classes of secured notes (the Original Notes). On 15 September 2006 (the Second Closing Date), the Issuer issued further classes of secured notes.

A common set of definitions, terms, Issuer representations and warranties and Issuer covenants apply across the transaction documents documenting the WBS (the Transaction Documents) pursuant to a master framework agreement originally dated the Original Closing Date (as amended and restated on the Second Closing Date, as amended and/or restated further from time to time) between, inter alios, the Issuer, the Borrower and the WBS Group Parent (the Master Framework Deed).

A summary of the key documents comprising the WBS financing is set out below:

(i) The Notes

On the Original Closing Date, the Issuer entered into a trust deed dated the Original Closing Date with HSBC Trustee (C.I) Limited (the Trustee) and Ambac Assurance UK Limited (Ambac) (the Original Trust Deed) pursuant to which it issued:

(A) £200 million Class Al Secured Floating Rate Notes due 2030 (the Class A1 Notes);

(B) £550 million Class A2 Secured 5.574 per cent. Notes due 2030 (the Class A2 Notes);

(D) £350 million Class Bl Secured 5.965 per cent. Notes due 2025 (the Class B1 Notes);

(E) £350 million Class B2 Secured 6.013 per cent. Notes due 2030 (the Class B2 Notes); and

(F) £200 million Class Cl Secured 6.469 per cent. Notes due 2032 (the Class C1 Notes),

together, the Original Notes.

On the Second Closing Date, pursuant to the terms of a supplemental trust deed dated the Second Closing Date (the First Supplemental Trust Deed and together with the Original Trust Deed, the Trust Deed), the Issuer issued:

(A) £200 million Class A1N Secured Floating Rate Notes due 2030 (the Class A1N Notes);

(B) $418,750 million Class A3N Secured Floating Rate Notes due 2030 (the Class A3N Notes);

(D) £325 million Class AB Secured Floating Rate Notes due 2033 (the Class AB Notes);

(E) £50 million Class C2 Secured Floating Rate Notes due 2034 (the Class C2 Notes); and

(F) £110 million Class Dl Secured Floating Rate Notes due 2036 (the Class D1 Notes and together with the Class A1N Notes, the Class A3N Notes, the Class A4 Notes, the Class AB Notes and the Class C2 Notes, the First New Notes).

On the Second Closing Date, the Issuer redeemed in full the Class A1 Notes and the Class A3 Notes. The outstanding Original Notes, together with the First New Notes are referred to collectively as the Notes.

158 Payments are made by the Issuer in respect of the Notes on 15 December, 15 March, 15 June and 15 September of each year (each, a Note Payment Date).

The payment of interest and repayment of principal by the Borrower in respect of the Term Advances under the Issuer/Borrower Facility Agreement (as described below) provides the primary source of funds for the Issuer to make payments of interest and repayments (or prepayments) of principal under the Notes.

Under the terms and conditions of the Notes (the Conditions), the Issuer may issue further notes in respect of each class of Notes, or may issue new notes subject to satisfaction of certain conditions set out in the terms and conditions of the Notes.

Under the Conditions, the Trustee (I) will, if Ambac is the Controlling Creditor, and the Trustee is so directed by Ambac; or (II) if Ambac is not the Controlling Creditor, the Trustee may, and will if so directed by an Extraordinary Resolution of the holders of the most senior class of Notes then outstanding or so requested in writing by the holders of at least one-quarter of the Most Senior Class of Notes then outstanding, give an enforcement notice (a Note Enforcement Notice) to the Issuer declaring the Notes to be immediately due and repayable at any time after the happening of any events designated a Note Event of Default.

(ii) Ambac Financial Guarantee

Ambac has, pursuant to the terms of a financial guarantee (the Financial Guarantee), granted a financial guarantee in respect of the Class A1N Notes, the Class A3N Notes, the Class A4 Notes and the Class AB Notes (the Wrapped Notes). Pursuant to the Financial Guarantee, Ambac has unconditionally and irrevocably guaranteed payments of interest and principal of the Wrapped Notes.

The Issuer has agreed to pay to Ambac certain fees as consideration for its guarantee of the Wrapped Notes, including a guarantee fee payable on each Note Payment Date in respect of certain classes of Wrapped Notes issued by the Issuer (the Guarantee Fee).

(iii) Controlling Creditor

The controlling creditor (Controlling Creditor) will be Ambac for so long as any of the Wrapped Notes are outstanding (or amounts are due to Ambac under the Financial Guarantee), provided that no Ambac Event of Default has occurred (which is continuing) and the Financial Guarantee is in full force and effect. Failing this, the Controlling Creditor will be the Trustee.

Subject to the provisions of the Trust Deed and the Conditions, for so long as Ambac is the Controlling Creditor, the Trustee will take directions from Ambac as to the exercise of certain of its powers and discretions, including taking any enforcement action against the Issuer, the Borrower and/or any other person (other than Ambac) following a Loan Event of Default or a Note Event of Default.

(iv) The Issuer/Borrower Facility Agreement

On the Original Closing Date, the Borrower, the WBS Group Parent (together with the Borrower, the Obligors), Mitchells & Butlers Leisure Retail Limited (as Cash Manager), the Issuer and the Borrower Security Trustee entered into the Original Issuer/Borrower Facility Agreement, pursuant to which the Issuer agreed to make available to the Borrower certain term facilities (the Initial Term Facilities). Advances under each of the Initial Term Facilities (the Initial Term Advances) were funded from the proceeds of the issue of each class of the Original Notes.

On the Second Closing Date, the Original Issuer/Borrower Facility Agreement was amended and restated (the Issuer/Borrower Facility Agreement) pursuant to which the Issuer made available to the Borrower additional term facilities (the First New Term Facilities, together with the Initial Term Facilities, the Term Facilities). Advances under each of the First New Term Facilities (the First New Term Advances, which together with the Initial Term Advances are referred to as the Term Advances) were funded from the proceeds of the issue of each class of the First New Notes.

The maturity date and loan payment dates in respect of each Term Advance correspond to the class of Notes that funded such Term Advance.

159 Interest

Interest on Term Advances is payable in arrear in pounds sterling in respect of the Aggregate Principal Debt Outstanding of the Term Advances on 15 December, 15 March, 15 June and 15 September in each year (or, if such day is not a business day, the next succeeding business day) (each, a Loan Payment Date). Each of the Term Advances has a different rate of interest. With the Aggregate Principal Debt Outstanding of the Term Advances at the date of this document being £1,580 million, the weighted average fixed cost of the Term Advances and all associated fees is currently £103 million per annum.

The obligations of the Borrower to pay floating rates of interest on the Term Advances is set off against the Issuer’s obligation to make floating rate payments under an Issuer/Borrower Swap Agreement.

The Issuer has entered into certain interest rate swap agreements so as to protect the Issuer against interest rate risks arising as a result of the Issuer being required to pay a floating rate of interest on the floating rate Notes whilst receiving net fixed rate payments from the Borrower under the Issuer/Borrower Facility Agreement when taken together with the Issuer/Borrower Swap Agreement.

Repayment

Each Term Advance will be repayable in instalments in accordance with a repayment schedule, the amounts of which correspond to the amounts specified in the schedule for the repayment of principal on the corresponding class of Notes such that each Term Advance will be fully repaid by its Final Maturity Date unless repaid or discharged in full earlier pursuant to the Issuer/Borrower Facility Agreement.

On the basis of certain assumptions as to interest rates, in the next 12 months, the Borrower is due to repay £105.3 million in principal payments and £98.5 million in interest, with an additional. £54.9 million in principal payments and £46.7 million in interest over the subsequent six months.

Voluntary prepayments and deemed prepayment upon purchase of Notes by the Borrower

The Borrower may prepay any Term Advance, in whole or in part, on a Loan Payment Date provided that the Borrower satisfies certain conditions set out in the Issuer/Borrower Facility Agreement.

Subject to satisfaction of certain conditions specified therein, the Borrower may purchase Notes of any Class and following such purchase, the Borrower must surrender such Notes to the Issuer for cancellation. Upon such cancellation, an amount of the relevant Term Advance equal to the principal amount outstanding of such Note plus an amount of interest on the relevant Term Advance equal to the aggregate of any accrued and unpaid interest on the principal amount outstanding of such Note will be treated as having been prepaid.

Financial covenants

Under the terms of the Issuer/Borrower Facility Agreement, the Borrower agrees to conduct its operation and business subject to a net worth covenant and a debt service coverage ratio covenant. These covenants provide that:

(A) the Net Worth of the Borrower in aggregate as at the end of each Financial Year will be equal to or greater than £500 million (the Net Worth Covenant); and

(B) the Free Cashflow DSCR of the Borrower will not, on any Financial Quarter Date, in respect of the most recent Relevant Period or the most recent Relevant Year be less than 1.10:1 (the FCF DSCR or the Debt Service Covenant).

Restricted Payment Condition

Each Obligor covenants and agrees with the Borrower Security Trustee and the Issuer that it will not make any payment (in cash or in kind) of a dividend, charge, fee, loan, repayment of loan, gift or other distribution (a Restricted Payment) to any member of the Group which is not a member of the WBS Group (an Excluded Group Entity) unless certain conditions are satisfied including satisfaction of the Restricted Payment Condition in the Relevant Period (being a period of two consecutive financial quarters) and the Relevant Year (being a period of four consecutive financial quarters).

160 The Restricted Payment Condition is satisfied if no Loan Event of Default has occurred or would occur and, in relation to the immediately preceding Relevant Period and immediately preceding Relevant Year:

(A) EBITDA to Debt Service was, in each case, at least 1.7:1; and

(B) the FCF DSCR was, in each case, at least 1.3:1.

The Issuer/Borrower Facility Agreement also specifies certain additional tests and restrictions, which apply in respect of the Obligors’ ability to make Restricted Payments.

Covenants

The Issuer/Borrower Facility Agreement also includes various covenants on the Obligors, including covenants regarding:

- disposal of mortgaged properties and the application of proceeds of any disposal of a mortgaged property; - disposal of other assets; - acquisition and substitution of pubs, bars and restaurants; - capital expenditure; - estate management transactions; and - provision of financial information.

Loan Events of Default

The events which can give rise to a Loan Event of Default include the following, in some cases which may be qualified by such events which have, or are reasonably expected to have, a Material Adverse Effect and/or may only constitute a Loan Event of Default after certain grace periods have elapsed:

- failure to pay by any member of the Security Group (as defined below) any amount owing under a Borrower Transaction Document; - breach of the financial covenants, which is not remedied in the manner provided for in the Issuer/ Borrower Facility Agreement; - breach of the Restricted Payment Condition; - breach of the Restricted Payment Condition, provided that in any case where such breach is capable of remedy, such breach is not remedied within a period of 20 days; - cross-acceleration of any indebtedness of any member of the Security Group (this would not include any default or acceleration of any indebtedness of any member of the Unsecured Group); and - any member of the Security Group ceases or suspends or threatens to cease or suspend all or a material part of its operations or business for a period of more than 30 days, other than pursuant to a solvent reorganisation or a Permitted Disposal.

The occurrence of a Loan Event of Default under the Issuer/Borrower Facility Agreement will entitle the Borrower Security Trustee (acting on the instructions of Ambac as Controlling Creditor) to declare all or any part of the outstanding Term Advances and other sums payable under the Issuer/Borrower Facility Agreement to be immediately due and repayable together with all accrued interest thereon.

In addition, it will entitle the Borrower Security Trustee (acting on the instructions of Ambac as Controlling Creditor) to enforce the Borrower Security by delivering a notice (a Loan Enforcement Notice) which will result in the floating charges contained in the Borrower Deed of Charge over the assets, property and undertaking of the Security Group to crystallise so as to become fixed charges. All monies standing to the credit of all of the Obligor Accounts may, in either of these circumstances, only be withdrawn with the prior consent of the Borrower Security Trustee.

(v) Borrower Security

The Obligors’ respective obligations under the Issuer/Borrower Facility Agreement are secured by security granted by each of the Borrower, the WBS Group Parent, certain members of the Group comprising Excluded Group Entity Property Owners (together the Security Group) in favour of HSBC Trustee (C.I.) Limited (as Borrower Security Trustee) pursuant to a deed of charge entered into on the Original Closing Date between,

161 inter alios, each member of the Security Group, the Borrower Security Trustee, the Issuer and Ambac, as supplemented from time to time (the Borrower Deed of Charge).

The security granted under the Borrower Deed of Charge (the Borrower Security) includes: (A) fixed security granted by the Borrower over each of its properties (comprising bars, pubs and restaurants) and all the shares held by it in its subsidiaries, and floating security over all or substantially all of its property, undertaking and assets; (B) fixed security from the WBS Group Parent over the shares held by it in the Issuer and the Borrower; and (C) fixed security from each Excluded Group Entity Property Owner over its legal interest in particular mortgaged properties and floating security over all or substantially all of its property, undertaking and assets.

The portfolio of mortgaged properties secured under the Borrower Deed of Charge (the Mortgaged Properties) and other assets, undertakings and rights of the members of the Security Group from time to time comprises the WBS Estate.

The Borrower Security Trustee holds the Borrower Security on trust for each of the Borrower Secured Creditors party to the Borrower Deed of Charge in such capacity (including the Issuer).

Under the terms of the Borrower Deed of Charge, the Borrower Security Trustee may only take action to enforce the Borrower Security if instructed to do so by Ambac as Controlling Creditor. For so long as Ambac is the Controlling Creditor, the Borrower Security Trustee does not have discretionary rights to take any enforcement action, nor does the Trustee or Noteholders have the direct ability to instruct the Borrower Security Trustee to do so.

(vi) Issuer security

The Issuer’s obligations under the Notes and the transaction documents to which it is party are secured. The Issuer has granted fixed and floating security over all or substantially all of its property, undertaking and assets (principally its rights under the Issuer/Borrower Facility Agreement and the Issuer’s rights under certain other transaction documents to which it is a party) and assigned its beneficial interest in the Borrower Security granted to the Borrower Security Trustee under the Borrower Deed of Charge, in each case, in favour of the Trustee.

The Issuer Deed of Charge also provides that, save where the Issuer has received funds from any Borrower in prepayment of any Term Advance, prior to delivery of a Note Enforcement Notice, amounts standing to the credit of the Issuer transaction accounts will be applied by the Issuer in accordance with the priority of payments set out therein (the Issuer Pre-Enforcement Priority of Payments).

(vii) Liquidity Facility

Under the terms of a liquidity facility agreement originally dated the Original Closing Date (as amended and/or restated from time to time) (the Liquidity Facility Agreement), Lloyds Bank plc and HSBC Bank plc as Liquidity Facility Providers have provided a 364-day renewable committed sterling revolving credit facility to the Issuer to permit drawings to be made up to £295 million (the Liquidity Facility). This amount will reduce, but will be required to remain equal to at least 18 months peak Debt Service in circumstances where, as a result of the Borrower failing to pay amounts due under the Issuer/Borrower Facility Agreement, the Issuer has insufficient funds available on any Note Payment Date (a Liquidity Shortfall), provided its drawdown conditions are satisfied. As at 19 February 2021, being the latest practicable date prior to the publication of this document, £9.1 million was outstanding under the Liquidity Facility.

The interest rate on liquidity drawings under the Liquidity Facility Agreement is the sum of LIBOR plus 1.00 per cent. per annum.

(viii) COVID-related amendments and waivers

As a result of the impact of the outbreak of COVID-19 and the related measures taken to stem the spread of the pandemic, in June 2020, the Issuer and the Borrower agreed a number of amendments and waivers with Ambac (as Controlling Creditor) and the Trustee in respect of the WBS so as to waive a number of breaches of certain provisions of the Issuer/Borrower Facility Agreement (the 2020 WBS Amendments and Waivers). These amendments and waivers included:

162 - a temporary waiver of, and amendment to, the 30-day suspension of business provision, which suspension has arisen because of the enforced UK Government measures during the COVID-19 pandemic;

- a waiver of the six-month look-back debt service coverage ratio test up until July 2021 and a waiver of the 12-month look-back debt service coverage ratio test up until September 2021;

- a reduction in the amount of the minimum amount required to be spent on capex by the Borrower during the remainder of this, and the next, financial year arising from the business having been temporarily suspended; and

- a waiver of the failure by the Borrower to pay in full the debt service which it is required to pay to the Issuer over the next three quarters, provided that such failure to pay results in the Issuer having to make drawings of no more than £100 million in total under its liquidity facility in order to meet payments of principal and interest on the Notes in respect of such quarters and provided further that any such drawings are repaid in full at the end of March 2021.

As a result of the continued spread of the COVID-19 pandemic, and the continued measures requiring closure of, or restriction on operations and/or capacity within, bars, restaurants and pubs within the WBS Estate, the Issuer and the Borrower have obtained further amendments and waivers with Ambac (as Controlling Creditor) and the Trustee in respect of the WBS so as to: (A) waive a number of breaches of certain provisions of the Issuer/Borrower Facility Agreement; and (B) provide the WBS Group with the financial flexibility to emerge from the difficulties of the COVID-19 pandemic (the 2021 WBS Amendments and Waivers). These amendments and waivers include:

- a further amendment to the 30-day suspension of business provision in order to carve out from such provision any closures, suspensions or operational restrictions arising as a result of measures adopted by the UK Government or by the Group in response to the COVID-19 pandemic, effective as of 31 December 2020;

- a waiver of, and modification to, the debt service coverage ratio covenant such that the six-month look-back covenant will be waived until January 2022 and will thereafter apply on a modified basis, and the 12-month look-back covenant will be waived until April 2022 and will thereafter apply on a modified basis, in each case until January 2023, subject to the right of the Borrower to terminate such waivers and modifications at an earlier date if it is of the opinion that it will be able to meet the debt service coverage ratio on an unwaived/unmodified basis;

- effective as of 14 February 2021, a waiver of the failure by the Borrower to pay in full the debt service which it is required to pay to the Issuer over the next three quarters, provided that: (I) such failure to pay results in the Issuer having to make drawings of no more than £110 million in total under its liquidity facility in order to meet payments of principal and interest on the Notes in respect of such quarters; (II) that the Company provides by way of equity injection into the WBS Group an amount equal to the amounts drawn under the liquidity facility in March and June 2021 (estimated to be £50.7 million in March 2020 and nil in June 2020); and (III) the Issuer makes a partial repayment of amounts drawn under the liquidity facility in September 2021 and repays any remaining outstanding drawings in full in December 2021;

- so as to facilitate disposals of properties by the WBS Group, an amendment to the disposal regime such that the basket which applies in respect of permitted disposals of properties (and which is calculated by reference to EBITDA of the properties for the relevant financial year within the WBS Estate) will be calculated by reference to the EBITDA of such properties in Financial Year 2019. This amendment will apply in respect of any proposed disposals in Financial Years 2021 and 2022; and

- the restriction on making acquisitions (which was agreed as part of the 2020 WBS Amendments and Waivers) has been lifted so as to permit acquisitions of assets to the extent such acquisitions comply with the regime set out in the Issuer/Borrower Facility Agreement.

The amendments in relation to the 30-day suspension of business provision (effective as of 31 December 2020) and the waivers and amendments in relation to the failure by the Borrower to pay in full the debt service over the next three quarters came into effect on 14 February 2021, with the balance of the amendments and waivers to become effective on the date of receipt by the Company of the proceeds of the Open Offer. To the extent

163 that the proceeds of the Open Offer are not received on or prior to 30 April 2021, Ambac and the Trustee will have the right to withdraw the consents which came into effect on 14 February 2021, with the balance of the amendments and waivers not coming into effect at all.

In order to secure such amendments and waivers, the WBS Group has had to agree, among other things, not to pay any dividends to the wider Group until after the time when the debt service coverage ratio levels are once more at or above the levels required to permit it to do so, which, as described above, may be January 2023 subject to the Borrower’s right to terminate such waivers and modifications relating to the debt service coverage ratio at an earlier date.

11 Related party transactions

Save as disclosed in Note 5.1 to the FY20 Financial Statements which is incorporated by reference herein, no member of the Group entered into any related party transactions (which for these purposes are those set out in the standards adopted according to the Regulation (EC) No 1606/2002) between 29 September 2018 and 19 February 2021, being the latest practicable date prior to the publication of this document.

12 Litigation

There are ongoing legal proceedings between the Company and Mitchells & Butlers Pensions Limited (the MABPP Trustee) in relation to the Mitchells & Butlers Pension Plan (MABPP), whereby the trust deed and the rules of the MABPP provide that it is a matter for the Company to determine the rate of inflation which should be applied to pension increases for certain sections of the membership in excess of guaranteed minimum pensions. The Company has instructed the MABPP Trustee to apply the consumer price index (subject to certain caps) in respect of such increases. The MABPP Trustee believes that this power was incorrectly vested in the Company in the trust deed and the rules of the MABPP in 1996. This power has been specified as vesting in the Company in subsequent versions of the trust deed and the rules of the MABPP. However, in February 2018, the MABPP Trustee made an application to court for the trust deed and the rules of the MABPP to be rectified. It is the Directors’ belief that the Company (which became principal employer of the MABPP in late 2003) holds the power to fix such an inflation index and the Company is therefore contesting that application. The actuarial surplus as determined under International Accounting Standard 19 (revised) has continued to be calculated using RPI, pending final resolution of the matter. The Directors do not expect the Company’s liability, if the case is lost, to exceed £2 million. See Note 4.5 of the FY20 Financial Statements, which is incorporated by reference herein, for more information.

Aside from as disclosed above, there are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), during the period covering the 12 months preceding the date of this document which may have, or have had in the recent past, significant effects on the Company’s and/or the Group’s financial position or profitability.

13 Regulatory disclosure

The Company regularly arranges the publication of announcements through a regulatory information service (RIS) system and the Company’s website. Below is a summary of the information disclosed in accordance with the Company’s obligations under the Market Abuse Regulation over the last 12 months relevant as at the date of this document. In addition to the RIS system, full announcements can be accessed on the webpage of the Company.

13.1 Inside information

13.1.1 On 9 January 2020, the Company released its first quarter trading statement covering the 14 weeks ended 4 January 2020.

13.1.2 On 22 January 2020, the Company announced the results of the voting at the Company’s Annual General Meeting on 21 January 2020.

13.1.3 On 18 March 2020, the Company announced that its recent trading has been severely impacted by the COVID-19 pandemic and the containment measures taken by the UK Government, including the recommendation to avoid pubs and restaurants.

164 13.1.4 On 14 April 2020, the Company released an update on the impact of the COVID-19 pandemic, including that all of its sites had been closed for over three weeks, a number of actions had been taken to reduce its cost base and that a waiver in regard to the WBS financing had been granted.

13.1.5 On 18 May 2020, the Company announced that the temporary waiver in regard to the WBS financing had been extended to 8 June 2020.

13.1.6 On 12 June 2020, the Company announced the extension of the term of existing £150 million committed unsecured facilities to 31 December 2021, the provision of an additional £100 million of liquidity, also to 31 December 2021, backed by the Coronavirus Large Business Interruption Loan Scheme facilitated by the UK Government and the agreement with Ambac and the Trustee to enter into the 2020 WBS Amendments and Waivers.

13.1.7 On 2 July 2020, the Company released its half year results covering the 28 weeks ended 11 April 2020.

13.1.8 On 24 September 2020, the Company released its pre-close trading update covering the 51 weeks ended 19 September 2020.

13.1.9 On 26 November 2020, the Company released its full year results for the 52 weeks ended 26 September 2020.

13.1.10 On 14 December 2020, the Company released its Annual Report and Accounts 2020 for the 52 weeks ended 26 September 2020.

13.1.11 On 7 January 2021, the Company released its first quarter trading statement covering the 14 weeks ended 2 January 2021.

13.2 Deals by persons discharging managerial responsibilities and their persons closely associated

13.2.1 Over the last 12 months, the Company disclosed the following PDMR dealings in accordance with its obligations under Article 19 of the Market Abuse Regulation:

(a) On 10 January 2020, Phil Urban purchased 31 partnership shares, Tim Jones purchased 32 partnership shares, Gary John purchased 32 partnership shares, Nick Crossley purchased 31 partnership shares, Susan Martindale purchased 31 partnership shares and Greg McMahon purchased 22 partnership shares under the Share Incentive Plan at a price of £4.3845;

(b) On 7 February 2020, Phil Urban purchased 33 partnership shares, Tim Jones purchased 33 partnership shares and Greg McMahon purchased 24 partnership shares under the Share Incentive Plan at a price of £4.15;

(c) On 6 March 2020, Phil Urban purchased 46 partnership shares, Tim Jones purchased 46 partnership shares and Greg McMahon purchased 34 partnership shares under the Share Incentive Plan at a price of £3.0396;

(d) On 3 April 2020, Phil Urban purchased 76 partnership shares, Tim Jones purchased 76 partnership shares and Greg McMahon purchased 55 partnership shares under the Share Incentive Plan at a price of £1.8241;

(e) On 1 May 2020, Phil Urban purchased 81 partnership shares, Tim Jones purchased 80 partnership shares and Greg McMahon purchased 58 partnership shares under the Share Incentive Plan at a price of £1.7141;

(f) On 29 May 2020, Phil Urban purchased 73 partnership shares, Tim Jones purchased 73 partnership shares and Greg McMahon purchased 53 partnership shares under the Share Incentive Plan at a price of £1.894;

(g) On 26 June 2020, Phil Urban purchased 71 partnership shares, Tim Jones purchased 72 partnership shares and Greg McMahon purchased 52 partnership shares under the Share Incentive Plan at a price of £1.9286;

165 (h) On 24 July 2020, Phil Urban purchased 86 partnership shares, Tim Jones purchased 85 partnership shares and Greg McMahon purchased 61 partnership shares under the Share Incentive Plan at a price of £1.6179;

(i) On 21 August 2020, Phil Urban purchased 84 partnership shares, Tim Jones purchased 84 partnership shares and Greg McMahon purchased 61 partnership shares under the Share Incentive Plan at a price of £1.646;

(j) On 18 September 2020, Phil Urban purchased 103 partnership shares, Tim Jones purchased 103 partnership shares and Greg McMahon purchased 75 partnership shares under the Share Incentive Plan at a price of £1.3372;

(k) On 16 October, Phil Urban purchased 104 partnership shares, Tim Jones purchased 105 partnership shares and Greg McMahon purchased 76 partnership shares under the Share Incentive Plan at a price of £1.3194;

(l) On 13 November 2020, Phil Urban purchased 64 partnership shares, Tim Jones purchased 63 partnership shares and Greg McMahon purchased 46 partnership shares under the Share Incentive Plan at a price of £2.1698; and

(m) On 11 December 2020, Phil Urban purchased 58 partnership shares, Tim Jones purchased 59 partnership shares and Greg McMahon purchased 42 partnership shares under the Share Incentive Plan at a price of £2.3498; and

(n) On 8 January 2021, Phil Urban purchased 59 partnership shares, Tim Jones purchased 58 partnership shares and Greg McMahon purchased 43 partnership shares under the Share Incentive Plan at a price of £2.3581.

14 Working capital

In the opinion of the Company, taking into account the net proceeds of the Open Offer and the bank and other facilities available to the Group, the Group has sufficient working capital for its present requirements, that is, for at least 12 months from the date of this document.

The working capital statement in this document has been prepared in accordance with the ESMA Recommendations and the technical supplement to the FCA Statement of Policy published on 8 April 2020 relating to the COVID-19 pandemic.

Assumptions in respect of the impact of COVID-19

In making the above working capital statement, the Company, as required by the ESMA Recommendations (ESMA/2013/319) (the ESMA Recommendations), has assessed whether there is sufficient headroom to cover a reasonable worst case scenario. COVID-19 has resulted in increased levels of uncertainty for the Company, with a range of possible scenarios and consequential financial impacts. For the purposes of this working capital statement, the Company has formed its view of a reasonable worst case scenario using the following COVID- 19-specific assumptions, which the working capital statement is therefore dependent upon:

- Full closure of the full estate, in both the United Kingdom and Germany, until 9 May 2021;

- Re-opening of all sites on 9 May 2021 on a restricted trading basis. For an initial period of 12 weeks to 31 July 2021, sites are assumed to operate at sales 30 per cent. below pre-COVID-19 levels (which represents the performance over the 13 four-week accounting periods ending 15 February 2020 on a like-for-like basis). Further easing of restrictions is assumed in August 2021 such that over the period from re-opening to the end of the financial year, sales in aggregate are 23 per cent. below pre- COVID-19 levels;

- The UK Government’s Job Retention Scheme being extended to cover future periods of closure on the same terms as currently in force. This extends beyond the current announced closure date of the Job Retention Scheme on 30 April 2021 to 9 May 2021;

- That there is no further wave of pandemic infection, involving new strains or otherwise, that lead to forced closure or the imposition of material restrictions on the ability of the Company to trade; and

166 - Further to the re-opening of sites on 9 May 2021, operating margins are expected to remain consistent with pre COVID-19 levels.

15 No significant change

Other than as described above, there has been no significant change in the financial position or the financial performance of the Group between 26 September 2020, the date to which the latest financial information in relation to the Group was published, and the date of this document.

16 Consents

Deloitte has given and not withdrawn its written consent to the inclusion in this document of its report set out in Section A of Part VIII – Unaudited Pro Forma Financial Information in the form and in the context in which it has been included and has authorised the contents of its report for the purposes of item 5.3.2R(2)(f) of the Prospectus Regulation Rules. This consent is available for inspection as set out in paragraph 19 of this Part X in connection with the publication of this document.

17 Non-statutory accounts

The financial information contained in this document, which relates to the Company and/or the Group, does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act. The auditors have reported on the statutory accounts for FY20. Their report was unqualified, did not include references to any matters by way of emphasis without qualifying their report and did not contain a statement under section 498(2) or (3) of the Companies Act.

18 Miscellaneous

18.2 The total costs and expenses payable by the Company in connection with the Open Offer (including the listing fees of the FCA and the London Stock Exchange, professional fees and expenses and the costs of printing and distribution of documents) are estimated to amount to £11 million (including VAT).

18.3 Each New Share is expected to be issued at a premium of £2 to its nominal value of 8 13/24 pence.

19 Documents available for inspection

Copies of the following documents may be inspected on the Group’s website at www.mbplc.com and at the offices of Freshfields Bruckhaus Deringer LLP at 100 Bishopsgate, London, EC2P 2SR, for a period of 12 months following Admission. Inspection of these documents in person may only take place in accordance with the measures imposed by the UK Government in connection with the COVID-19 pandemic:

(a) the Articles;

167 (b) the FY20 Financial Statements, incorporated herein by reference;

(d) the form of the Application Form; and

(e) this document.

Dated: 22 February 2021

168 PART XI – DOCUMENTATION INCORPORATED BY REFERENCE

The following documentation, which has been approved, filed with or notified to the FCA, and which was sent to Shareholders at the relevant time and/or is available as described below, contains information that is relevant to the Open Offer. This documentation is available on the Company’s website at www.mbplc.com.

The table below sets out the various sections of the document referred to above which are incorporated by reference into this document, so as to provide information required pursuant to Annex 3 and Annex 12 to the UK Prospectus Regulation and to ensure that Shareholders and others are aware of all information which, according to the particular nature of the Company and of the New Shares, is necessary to enable Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profit and losses and prospects of the Company and of the rights attaching to the New Shares.

Parts of this document incorporated by reference which are not set out below are either not relevant or are covered elsewhere in this document. To the extent that any part of any information referred to below itself contains information which is incorporated by reference, such information will not form part of this document.

FY20 Annual Report and Financial Statements

Page number in Information incorporated by reference into this document reference document Financial Review ...... 41 – 44 Corporate Governance Statement ...... 59 – 69 Report on Directors’ Remuneration ...... 74 – 89 Independent Auditor’s Report to the members of Mitchells & Butlers plc ...... 91 – 98 Group Income Statement ...... 99 Group Statement of Comprehensive Income ...... 100 Group Balance Sheet ...... 101 Group Statement of Changes in Equity ...... 102 Group Cash Flow Statement ...... 103 Notes to the Mitchells & Butlers Financial Statements ...... 104 – 154

FY19 Annual Report and Financial Statements

Page number in Information incorporated by reference into this document reference document Financial Review ...... 46 – 48 Independent Auditor’s Report to the members of Mitchells & Butlers plc ...... 99 – 105 Group Income Statement ...... 106 Group Statement of Comprehensive Income ...... 107 Group Balance Sheet ...... 108 Group Statement of Changes in Equity ...... 109 Group Cash Flow Statement ...... 110 Notes to the Mitchells & Butlers Financial Statements ...... 111 – 151

FY18 Annual Report and Financial Statements

Page number in Information incorporated by reference into this document reference document Financial Review ...... 43 – 45 Independent Auditor’s Report to the members of Mitchells & Butlers plc ...... 93 – 99 Group Income Statement ...... 100 Group Statement of Comprehensive Income ...... 101 Group Balance Sheet ...... 102 Group Statement of Changes in Equity ...... 103 Group Cash Flow Statement ...... 104 Notes to the Mitchells & Butlers Financial Statements ...... 105 – 142

169 PART XII – DEFINITIONS AND GLOSSARY

2021 WBS Amendments and the amendments and waivers to the Issuer/Borrower Facility Waivers Agreement agreed on 14 February 2021

Act or Companies Act the Companies Act 2006

Admission admission to: (a) the premium listing segment of the Official List; and (b) trading on the London Stock Exchange’s main market for listed securities

Ambac Ambac Assurance UK Limited

Announcement the announcement of the Open Offer released by the Company through a Regulatory Information Service on 15 February 2021

Application Form the personalised application form on which the Qualifying Non- CREST Shareholders may apply for New Shares under the Open Offer

Articles the articles of association of the Company which are described in paragraph 4 of Part X – Additional Information

Board the board of directors of the Company

Brexit the United Kingdom’s exit from the European Union

Business Days a day (other than a Saturday or Sunday) on which banks are open for general business in London

CCSS the CREST Courier and Sorting Service established by Euroclear to facilitate, amongst other things, the deposit and withdrawal of securities certificated or in certificated a share or other security which is not in uncertificated form (that is, not in form CREST)

CGT United Kingdom taxation of chargeable gains

City Code The City Code on Takeovers and Mergers

Company Mitchells & Butlers plc

Consortium Piedmont Inc., Elpida Group Limited and Smoothfield Holding Ltd.

CREST the CREST system (as defined in the CREST Regulations)

CREST Manual the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure, CREST Glossary of Terms and CREST Terms and Conditions (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since)

CREST member a person who has been admitted by Euroclear as a system-member (as defined in the CREST Regulations)

CREST Proxy Instruction instruction to appoint a proxy or proxies through the CREST electronic proxy appointment service, as described in the Notice of General Meeting at the end of this document

CREST Regulations the Uncertificated Securities Regulations 2001 (SI 2001/3755)

CREST sponsor a sponsor (as defined in the CREST Regulations) in relation to CREST

170 CREST sponsored member a CREST member admitted to CREST as a sponsored member

Directors the Executive Directors and Non-Executive Directors of the Company

Disclosure Guidance and the Disclosure Guidance and Transparency Rules of the Financial Conduct Transparency Rules Authority dividend income United Kingdom and non-United Kingdom source dividends and certain other distributions in respect of shares

EBITA earnings before interest, taxes and amortisation

EBITDA earnings before interest, taxes, depreciation and amortisation

EEA the European Economic Area

EEA State a Member State of the EEA

Enlarged Share Capital the ordinary issued share capital of the Company immediately following completion of the Open Offer, assuming all 166,937,606 New Shares are issued

Equiniti Equiniti Limited, the Registrar and Receiving Agent

EU European Union

Euroclear Euroclear UK & Ireland Limited

Excess Allocation Method the Excess Allocation Method referred to in paragraph 2 of Part III – Terms and Conditions of the Open Offer

Excess Application Cap the Excess Application Cap referred to in paragraph 2 of Part III – Terms and Conditions of the Open Offer

Excess Application Facility the facility for Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlements

Excess Open Offer Entitlements in respect of each Qualifying Shareholder who has taken up his or her Open Offer Entitlement in full, the entitlement (in addition to the Open Offer Entitlement) to apply for Excess Shares pursuant to the Excess Application Facility, which may be subject to scaling down in accordance with the Excess Allocation Method and the terms of this document

Excess Share Applicant each Qualifying Shareholder who has (i) taken up its Open Offer Entitlement in full and (ii) applied for Excess Shares under the Excess Application Facility

Excess Shares New Shares which may be applied for by Qualifying Shareholders in addition to their Open Offer Entitlements pursuant to the Excess Application Facility

Excluded Territories Australia, Canada, Japan, New Zealand, the Republic of Ireland, South Africa and the United States

Executive Directors the executive directors of the Company

Existing Facilities (a) the bilateral revolving facility agreements entered into between the Company, Mitchells & Butlers Retail (No. 2) Limited, Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc on 20 September 2017; and (b) the bilateral term facility agreements (structured under the UK Government-backed Coronavirus Large Business Interruption Loan Scheme) entered into between the Company, Mitchells & Butlers Retail

171 (No. 2) Limited, HSBC UK Bank plc and Santander UK plc on 11 June 2020

Ex-Entitlement Date the date on which Existing Shares are marked ex-entitlement, being 22 February 2021

Existing Shares the existing Shares in issue immediately prior to the issue of the New Shares

Financial Adviser or N.M. Rothschild & Sons Limited Rothschild & Co

Financial Conduct Authority the Financial Conduct Authority acting in its capacity as the competent or FCA authority for the purposes of Part VI of the FSMA

Form of Proxy the form of proxy for use at the General Meeting which accompanies this document

Forward-looking Statements forward-looking statements, forecasts, estimates, projections and opinions

FSMA the Financial Services and Markets Act 2000, as amended

FY18 Annual Report and the annual report prepared by the Group for the 52 weeks ended Financial Statements 29 September 2018 and the financial statements included therein

FY18 Financial Statements the audited consolidated financial statements of the Company, which comprise the consolidated statement of financial position and the related consolidated statements of income, comprehensive income, changes in equity and cash flows and the related notes to the consolidated financial statements, as of and for the 52 weeks ended 29 September 2018

FY18 the 52 weeks ended 29 September 2018

FY19 Annual Report and the annual report prepared by the Group for the 52 weeks ended Financial Statements 28 September 2019 and the financial statements included therein

FY19 Financial Statements the audited consolidated financial statements of the Company, which comprise the consolidated statement of financial position and the related consolidated statements of income, comprehensive income, changes in equity and cash flows and the related notes to the consolidated financial statements, as of and for the 52 weeks ended 28 September 2019

FY19 the 52 weeks ended 28 September 2019

FY20 Annual Report and the annual report prepared by the Group for the 52 weeks ended Financial Statements 26 September 2020 and the financial statements included therein

FY20 Financial Statements the audited consolidated financial statements of the Company, which comprise the consolidated statement of financial position and the related consolidated statements of income, comprehensive income, changes in equity and cash flows and the related notes to the consolidated financial statements, as of and for the 52 weeks ended 26 September 2020

FY20 the 52 weeks ended 26 September 2020

GDPR the General Data Protection Regulation (Regulation (EU) 2016/679)

General Meeting the general meeting of the Company to be held at 10.00 a.m. on 11 March 2021, notice of which is set out at the back of this document

Global Co-ordinator Morgan Stanley

172 Group the Company and its subsidiary undertakings and, where the context requires, its associated undertakings

HMRC HM Revenue & Customs

HSBC HSBC Bank plc

IFRS International Financial Reporting Standards, as adopted by the EU

ISIN International Securities Identification Number

Issuer/Borrower Facility an issuer/borrower facility agreement between Mitchells & Butlers Retail Agreement Limited and Mitchells & Butlers Finance plc dated 15 September 2006

Joint Bookrunners HSBC and Santander

Lenders Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc

Listing Rules the listing rules of the FCA

London Stock Exchange London Stock Exchange plc

Main Market the London Stock Exchange’s main market for listed securities

Market Abuse Regulation the UK version of Regulation (EU) 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended from time to time

Mitchells & Butlers Mitchells & Butlers plc and its subsidiary undertakings and, where the context requires, its associated undertakings

Money Laundering Regulations Money Laundering Regulations 2007 (SI 2007/2157)

Morgan Stanley Morgan Stanley & Co. International plc

New Debt Package the revolving facility agreement entered into between the Company, Mitchells & Butlers Retail (No. 2) Limited, Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc on 14 February 2021

New Shares up to 166,937,606 Shares which the Company intends to allot and issue pursuant to the Open Offer

Nominated Person as defined in the Notice of General Meeting

Non-Executive Directors the non-executive directors of the Company

Notice of General Meeting the notice of General Meeting set out at the back of this document

Odyzean Odyzean Limited

Odyzean Group Odyzean Limited and its subsidiary undertakings, being Piedmont Inc., Elpida Group Limited and Smoothfield Holding Ltd.

Offer Price 210 pence per share

Official List the Official List of the FCA

Open Offer the conditional invitation to Qualifying Shareholders to subscribe for the New Shares at the Offer Price on the terms and subject to the conditions

173 set out in this document and, in the case of Qualifying Non- CREST Shareholders only, the Application Form

Open Offer Entitlements entitlements to subscribe for the New Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer

Overseas Shareholders Shareholders with registered addresses in, or who are citizens, residents or nationals of jurisdictions outside the United Kingdom

Prospectus Delegated the Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation the Prospectus Regulation

Prospectus Regulation the Prospectus Regulation (EU) 2017/1129 and amendments thereto

Prospectus Regulation Rules the prospectus rules published by the FCA under section 73A of the FSMA

Qualifying Qualifying Shareholders holding Shares in uncertificated form CREST Shareholders

Qualifying Non- Qualifying Shareholders holding Shares in certificated form CREST Shareholders

Qualifying Shareholders Shareholders on the register of members of the Company on the Record Date with the exclusion of persons with a registered address or located or resident in an Excluded Territory (subject to certain exceptions)

Receiving Agent Equiniti

Record Date 6.00 p.m. on 17 February 2021

Refinanced Facilities the bilateral revolving facility agreements entered into between the Company, Mitchells & Butlers Retail (No. 2) Limited, Barclays Bank PLC, HSBC UK Bank plc and Santander UK plc on 20 September 2017

Registrar Equiniti Limited

Regulation S Regulation S under the Securities Act

Relevant Member State each Member State of the European Economic Area

Resolutions the resolutions to be proposed at the General Meeting, as set out in the notice at the back of this document

Santander Banco Santander, S.A.

Santander CLBILS the bilateral term facility agreement (structured under the UK Government- backed Coronavirus Large Business Interruption Loan Scheme (the CLBILS) entered into with Santander UK plc on 11 June 2020

SDRT Stamp Duty Reserve Tax

Securities Act United States Securities Act of 1933, as amended

SEDOL Stock Exchange Daily Official List

Shareholder Undertaking the irrevocable undertaking given by each of the members of the Odyzean Group to the Company, dated 22 February 2021

Shareholders holders of Shares

174 Shares ordinary shares of 8 13/24 pence each in the capital of the Company having the rights set out in the Articles as described in paragraph 4 of Part X – Additional Information

Share Schemes Mitchells & Butlers’ Performance Restricted Share Plan, Sharesave Plan, Share Incentive Plan and Short Term Deferred Incentive Plan, as described in Note 4.6 of the FY20 Financial Statements

Sponsor Morgan Stanley

Takeover Code The City Code on Takeovers and Mergers

Trustee HSBC Trustee (C.I) Limited

UK Corporate Governance Code the UK Corporate Governance Code issued by the Financial Reporting Council, as amended from time to time

UK Government the Government of the United Kingdom

UK Government’s Job Retention the UK Government’s Coronavirus Job Retention Scheme Scheme

UK Prospectus Regulation the UK version of Regulation (EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018

Unaudited Pro Forma Financial unaudited pro forma statement of net assets and accompanying notes set Information out in Section A of Part VIII – Unaudited Pro Forma Financial Information prepared to show the effect of the Open Offer on the Group’s net assets as at 26 September 2020 as if the Open Offer had been undertaken at that date uncertificated or in recorded on the register of members as being held in uncertificated form in uncertificated form CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST

Underwriters Morgan Stanley, HSBC and Santander

Underwriting Agreement the underwriting agreement entered into between the Company and the Underwriters on 22 February 2021

United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland

United States or US the United States of America, its territories and possessions, any state of the United States and the District of Columbia

VAT (a) any tax charged in accordance with the Value Added Tax Act 1994, as may be amended or substituted from time to time; (b) any tax imposed by any Member State in conformity with the directive of the council of the European Union on the common system of value added tax (2006/112/EC); and (c) any tax corresponding to, or substantially similar to, the taxes referred to in paragraphs (a) and (b) above of this definition

WBS Group Mitchells & Butlers Retail Holdings Limited and Mitchells & Butlers Retail Limited

175 NOTICE OF GENERAL MEETING

MITCHELLS & BUTLERS PLC (registered in England and Wales under number 04551498) Notice is hereby given that a General Meeting of Mitchells & Butlers plc (the Company) will be held at 10.00 a.m. on 11 March 2021 (the General Meeting) by telephone. In light of the Coronavirus (COVID-19) outbreak, shareholders will not be able to attend the General Meeting in person but will be able to listen to the business of the General Meeting via a telephone facility, the details of which can be found in the Explanatory Notes to this Notice of General Meeting. The General Meeting will be convened with the minimum necessary quorum of shareholders, which will be facilitated by the Company.

You are being asked to consider and pass the resolutions below (the Resolutions). Each of the Resolutions will be proposed as an ordinary resolution. Each of the Resolutions is conditional on all of the other Resolutions being passed.

Resolution 1

THAT, subject to and conditional upon the passing of each of the other Resolutions, the directors of the Company be generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 (the Act) to:

(a) allot shares in the Company, and to grant rights to subscribe for or to convert any security into shares in the Company up to an aggregate nominal amount of £14,259,254 pursuant to or in connection with the Open Offer as defined and described in the combined prospectus and circular of the Company dated 22 February 2021 of which this Notice of General Meeting forms part (the Prospectus), for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) three months after the date on which this resolution is passed; and

(b) make an offer or agreement in connection with the Open Offer which would or might require shares to be allotted, or rights to subscribe for or convert any security into shares to be granted, after expiry of this authority and the directors may allot shares and grant rights in pursuance of that offer or agreement as if this authority had not expired.

Resolution 2

THAT, subject to and conditional upon the passing of each of the other Resolutions, the issue of up to 166,937,606 ordinary shares in the Company of 8 13/24 pence each pursuant to the Open Offer for cash at a price of 210 pence per share (which represents a discount of more than 10 per cent. to the middle market price of the ordinary shares in the Company as at 12 February 2021, being the business day prior to the announcement of the terms of the Open Offer) and otherwise on the terms set out in the Prospectus be and is hereby approved.

Resolution 3

THAT, subject to and conditional upon the passing of each of the other Resolutions, the terms of the Open Offer be and are hereby approved and the Directors of the Company be and are hereby directed to implement the Open Offer on the basis described in the Prospectus and are generally and unconditionally authorised to exercise all or any of the powers of the Company to the extent necessary to implement the Open Offer.

22 February 2021

By order of the board

Greg McMahon Company Secretary and General Counsel

Registered Office: 27 Fleet Street Birmingham B3 1JP Registered in England and Wales No. 04551498

176 EXPLANATORY NOTES

The following notes explain your general rights as a Shareholder and your rights to participate in and vote at the General Meeting or to appoint someone else to vote on your behalf.

Entitlement to participate in the General Meeting and vote

1. In light of the ongoing COVID-19 pandemic, the General Meeting will be held by telephone facility only and so the Directors regret that Shareholders will not have the opportunity to attend the General Meeting in person. The health and wellbeing of the Company’s employees, Shareholders and the wider communities in which it operates is of paramount importance to the Directors and the restrictions on attendance set out in these Explanatory Notes are necessary and appropriate to take given the current pandemic. Unfortunately, this means that Shareholders will also not be able to vote or ask questions during the General Meeting itself. Please see below details on how Shareholders can exercise their right to vote and ask questions in advance of the General Meeting and the associated timescales.

The Directors are keen to ensure that Shareholders are able to exercise their right to vote and, accordingly, as Shareholders cannot attend or vote in person at the General Meeting, we strongly encourage Shareholders to vote on all Resolutions in advance of the General Meeting by completing their proxy forms. Shareholders should appoint the chairman of the General Meeting (and not any named individual) to act as their proxy, otherwise their votes will be incapable of being cast.

The Company specifies that only those Shareholders on the register of members at 6.30 p.m. on 9 March 2021 (or, if the General Meeting is adjourned, in the register of members at 6.30 p.m. two Business Days before any adjourned General Meeting) will be entitled to participate in the General Meeting (by telephone) and vote in respect of the number of ordinary shares in the capital of the Company registered in their names at that time. Changes to entries in the register of members after that time will be disregarded in determining the rights of any person to participate in and vote in respect of the General Meeting.

To support engagement with the Shareholders, the Company is providing a telephone facility to allow Shareholders to listen to the business of the General Meeting. The telephone number is 0800 358 6377 (if dialling in from the UK) and +44 330 336 9125 (if dialling in from outside the UK). Shareholders will need to use the confirmation code 4407627 to access the telephone facility. Please also check the Company’s website (www.mbplc.com) in advance of the General Meeting in case there are further changes to the arrangements for the General Meeting itself.

Please note that any such Shareholder participation via the telephone facility will not constitute formal attendance in respect of the General Meeting and Shareholders will not be able to vote on any resolutions during the General Meeting. We therefore encourage you to register your vote in advance in the ways described within this Notice of Meeting.

Shareholders’ rights to ask questions

2. The Board recognises the importance of being able to answer Shareholders’ questions. Unfortunately, Shareholders will not be able to ask questions at the General Meeting itself, so all Shareholders and their proxies are therefore invited to contact the Shareholder helpline on 0333 207 6535 (or +44 333 207 6535 if calling from outside the United Kingdom) in advance of the General Meeting with any questions they have relating the business of the General Meeting. Such questions will either be answered by Equiniti or passed on to the Company and the Company will endeavour to respond directly to the relevant Shareholder and/or make the answer available on the Company’s website as soon as practicable following receipt.

Proxies

3. Only holders of ordinary shares, or their duly appointed representatives, are entitled to participate in (using the telephone facility) and vote in respect of the General Meeting. Shareholders so entitled may appoint a proxy(ies), who need not be a Shareholder(s), to exercise any of their rights in relation to the General Meeting. A Shareholder may appoint more than one proxy in relation to meetings provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that Shareholder. However, as mentioned in this notice, in light of the evolving COVID-19 situation and

177 proposed arrangements, to ensure that your vote counts, shareholders are strongly encouraged to appoint the chairman of the General Meeting (and not any named individual) as their proxy and then complete, sign and return the Form of Proxy to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA as soon as possible but in any event no later than 10.00 a.m. on 9 March 2021. Appointing a proxy will not prevent Shareholders from listening to the General Meeting via the telephone facility should they wish to do so.

A proxy form is enclosed and instructions for its use are shown on the form. Shareholders should appoint the chairman of the General Meeting (and not any named individual) as their proxy in order for their votes to be cast. The chairman of the General Meeting will vote in accordance with your instructions. If no voting indication is given, the chairman of the General Meeting (or any other person you appoint) as proxy will vote or abstain from voting at his discretion. The chairman of the General Meeting (or any other person you appoint) as proxy will vote (or abstain from voting) as he thinks fit in relation to any other matter which is put before the General Meeting. If you do not have a proxy form and believe that you should have one, or if you require additional forms, it is available to download at www.mbplc.com.

A Shareholder may only appoint a proxy or proxies by:

- going to www.sharevote.co.uk and following the instructions provided;

- if they are a user of the CREST system (including CREST personal members), having an appropriate CREST message transmitted; or

- completing and returning the proxy form enclosed in this pack or a downloaded proxy form to the Registrar, Equiniti. Note that due to COVID-19, the postal services cannot be guaranteed and we therefore urge shareholders to vote online at www.sharevote.co.uk.

To be valid, the proxy form, together with the power of attorney or other authority under which it is signed (if any) or a duly certified copy of the authority, or validated electronic proxy voting instructions, must be received at the offices of the Registrar by 10.00 a.m. on 9 March 2021 or, if the General Meeting is adjourned, not later than 48 hours (excluding non-working days) before the time fixed for the adjourned meeting.

Shareholders may use the proxy form or electronic proxy voting arrangements to vote in one of three ways: ‘for’, ‘against’ or ‘vote withheld’. Please note that a ‘vote withheld’ has no legal effect and will count neither for nor against a resolution when proxy votes are counted on each resolution.

You can change your proxy instructions by submitting a new proxy appointment using the methods set out in these Explanatory Notes. Note that the cut-off time for receipt of proxy appointments also applies in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time has passed will be disregarded. If you submit more than one valid proxy appointment, the latest valid appointment received before the cut-off time for the receipt of proxies will take precedence.

An electronic proxy appointment may be revoked completely by sending an authenticated CREST message or by accessing your account at www.sharevote.co.uk and instructing the removal of your proxy vote. In the case of written proxy instructions submitted on a proxy form, you will need to inform the Company by sending a signed written statement, clearly stating your intention to revoke your proxy appointment to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA or by lodging proxy votes electronically through CREST or at www.sharevote.co.uk. Any revocation notice must be received by Equiniti no later than 10.00 a.m. on 9 March 2021.

Online proxy appointment

4. If you wish, you may register the appointment of a proxy for the General Meeting electronically, by visiting the Registrar’s website (www.sharevote.co.uk) where full details of the procedure are given. You can register the appointment of a proxy or proxies, or voting instructions for the General Meeting, electronically by logging on to www.sharevote.co.uk. You will need to your Voting ID, Task ID and Shareholder Reference Number which are printed on your proxy form. The proxy appointment and

178 voting instructions must be received by Equiniti not less than 48 hours before the time for holding the General Meeting (or, in the case of an adjournment, not later than 48 hours (excluding non-working days) before the time fixed for the holding of the adjourned meeting) or for the taking of the poll at which it is to be used. Please note that any electronic communication sent to the Company or Equiniti that is found to contain a computer virus will not be accepted. The use of the internet service in connection with the General Meeting is governed by Equiniti’s conditions of use set out on the website, www.sharevote.co.uk, which may be read by logging on to that site.

CREST

5. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the General Meeting to be held on 11 March 2021 and any adjournment(s) thereof by following the procedures described in the CREST Manual (available at www.euroclear.com). CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Equiniti (ID RA19) by 10.00 a.m. on 9 March 2021 (or, in the case of an adjournment, not later than 48 hours (excluding non-working days) before the time fixed for the holding of the adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Equiniti is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as will be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. CREST personal members, sponsored members and CREST members who have appointed a voting service provider(s) should contact their CREST sponsor or voting service provider(s) for assistance with appointing proxies via CREST.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Further details of the appointment of proxies are given in the notes to the proxy form enclosed with this pack.

To appoint more than one proxy, please fill in a separate copy of the proxy form. However, please note that the Company advises shareholders to appoint only the chairman of the General Meeting (and not any named individual) as their proxy, as this will ensure your votes are cast in accordance with your wishes. If you appoint someone else as your proxy, that proxy will not be permitted to participate in the General Meeting and therefore your vote will not be counted.

IMPORTANT: In any case your proxy form must be received by the Registrar, Equiniti, by no later than 10.00 a.m. on 9 March 2021. The Company strongly recommends returning proxy forms by e-mail, as the postal service cannot be guaranteed due to COVID-19.

179 Corporate representatives

6. Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of the same powers as the corporation could exercise if it were an individual member provided that they do not do so in relation to the same shares. If two or more such representatives purport to vote in respect of the same shares:

- if they purport to exercise the power in the same way as each other, the power is treated as exercised in that way; and

- in other cases, the power is treated as not exercised.

Nominated persons

7. Any person to whom this notice is sent who is a person nominated under section 146 of the Act to enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.

The statement of the rights of shareholders in relation to the appointment of proxies in paragraph 3 does not apply to Nominated Persons. The rights described in that paragraph can only be exercised by shareholders of the Company.

Issued share capital and total voting rights

8. As at 19 February 2021 (being the latest practicable date prior to the publication of this notice) the Company’s issued share capital consisted of 429,268,130 ordinary shares carrying one vote each. No shares were held in treasury. The total number of voting rights in the Company as at 19 February 2021 (being the last practicable date prior to the date of this notice) was 429,268,130.

Voting

9. Voting in respect of the resolutions to be proposed at the General Meeting will be conducted by way of a poll rather than a show of hands. Calling a poll on each resolution allows all proxy votes cast to be counted and reported.

Contact details

10. Shareholders are advised that, unless otherwise stated, any telephone number, website and email address set out in this Notice of General Meeting, proxy form or the Prospectus should not be used for any purposes other than as expressly stated.

Website

11. A copy of this notice, and other information required by section 311A of the Act, can be found at www.mbplc.com.

Voting results

12. The results of the voting at the General Meeting will be announced through a Regulatory Information Service and will appear on the Company’s website (www.mbplc.com) as soon as practicable after the General Meeting.

180 Toppan Merrill, London 21-5585-1