The Financial Times published an article earlier this month suggesting that U.K. pub operator Mitchells & Butlers Finance's whole business securitization could implicitly constitute a "poison pill" in the takeover bid led by the consortium R20. The reasoning is that a bid might prompt the redemption of the whole business notes at a premium.

Deutsche Bank equity research analysts released a report that suggested the R20 might have to employ an aggressively levered whole business financing structure to make the takeover attractive and workable. To take this route, the M&B securitization structure would have to first be unwound. This could incur significant costs if the notes are called on the yield make-whole particularly on the fixed rate notes. There are also associated swap breakage costs on the floating and dollar denominated notes, explained Ganesh Rajendra at Deutsche Bank in a report last week.

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