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* M&B says Piedmont undermining effectiveness of board

* Pidemont blocked appointment of chairman

* Says will submit evidence to takeover watchdog

* Shares up 1.4 pct

(Adds shares, analyst comment, details)

By Rhys Jones

LONDON, Nov 30 (Reuters) – Pubs operator Mitchells & Butlers
Plc (MAB.L) will ask Britain’s takeover watchdog to rule whether
rebel shareholders are attempting to gain control of the group
after they blocked the appointment of a chairman.

M&B said on Monday that Piedmont Inc, the investment vehicle
owned by billionaire Joe Lewis, which owns 23 percent of the
group, had obstructed the appointment of an independent chairman
and vetoed three candidates at the final stage despite being
involved in the hiring process from its beginning.

“The Panel on Takeovers and Mergers has been approached and
a submission will be made imminently regarding the cumulative
evidence that a number of shareholders have been seeking to gain
control of the board and of the company to advance the interests
of a small group of shareholders at the expense of others,” M&B
said in a statement.

Weekend press reports said Lewis had blocked the appointment
of Archie Norman, who was this month appointed chairman of
broadcaster ITV (ITV.L), as chairman of M&B.

Piedmont could not be immediately reached for comment.

Shares in M&B, which have increased 60 percent this year,
were 1.4 percent up at 255.5 pence by 0830 GMT, valuing the
company at around 1 billion pounds.

“The sense is that Lewis is exerting a restraining influence
on the group,” said KBC Peel Hunt analyst Paul Hickman.

“The possibility this raises is that if the majority board
is successful in restraining the influence of Lewis it could get
involved in the land grab in the sector or even raise money.”

Rival pub firms Greene King (GNK.L) and Marstons (MARS.L)
have recently tapped the market for cash to buy up distressed
pub assets from struggling groups Punch Taverns (PUB.L) and
Enterprise Inns (ETI.L).

The owner of Harvester, Toby Carvery and All Bar One added
that Piedmont had also demanded the resignation of senior
independent director, Simon Laffin, advising him that if he did
not leave the company a small number of large shareholders would
vote against his election at the company’s annual general
meeting in January 2010.

M&B also said it was trying to strengthen the board through
further independent appointments and to identify an independent
candidate to succeed Drummond Hall as chairman.
(Editing by Paul Sandle and Karen Foster)
($1=.6105 Pound)
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