Letter From Elpida to the Board of Directors of Mitchells & Butlers

ROAD TOWN, British Virgin Islands, January 27 - Elpida, a long term investor in Mitchells & Butlers plc, has written a
letter to their Board of Directors (Antony Bates, Adam Fowle , Drummond Hall,
Simon Laffin, Sir Tim Lankester, Jeremy Townsend, Sara Weller) in connection
with Elpida's shareholding in the Company. The contents are as follows:

"Mr Laffin and The Annual General Meeting

We write to express our concerns on issues in connection with
our shareholding in the Company, particularly in the light of recent
interviews and comments made by Mr Laffin to the press have prompted us to
write this letter.

No Confidence in Simon Laffin as Chairman

Elpida has no confidence in Simon Laffin as Chairman. We will
be casting our votes to achieve a new independent Board for the company at
the Annual General Meeting on Thursday 28 January 2010 for the reasons set
out below.

Disillusionment over the swaps deal

The Company announced a pre-tax cash loss of GBP386 million on 29 January
2008 following a decision to enter into an interest swaps arrangement when
the Company had not yet put in place a financial package on a binding basis.
We have been told that the risk that the banks would not proceed was believed
to be low. The result was that the banks were able to withdraw their
previously agreed debt package terms and this left the Group with the hedge
instruments but unable to proceed with the transaction. In our view, it
should be a matter of real concern to all shareholders that a situation like
this should have been allowed to arise.

Disillusionment over the retained swaps write-down

In the 2008 Annual Report, the Chairman's statement mentioned the closed
hedges but there was no mention of any potential future disaster about to
happen. It was only on 21 May 2009 that a further net pre-tax loss of GBP96
million in respect of the retained swaps was revealed after the swaps had
been closed out because it had become clear that a long term debt structure
would not be available in the foreseeable future on commercially acceptable
terms.

The unlawful removal of four directors

Our understanding is that the Board members were called to a Board
meeting by telephone on the evening of Monday 30 November 2009. No agenda was
circulated for this meeting and no notice was given of any of the matters to
be discussed.

At the start of the meeting Mr McGuire (who was attending by telephone)
was informed by Mr Hall that he was being removed as a director. He objected
and was told that he was guilty of conduct adverse to the Board and damaging
to the reputation of the Company. No reference was made to any provision of
the articles that empowered the Board to take this action. Mr McGuire was
told to hang up his phone and was therefore not able to participate any
further in the meeting.

Mr McMahon was then told that he was also being removed. He asked what
the reason for this was but Mr Hall would not give a reason other than to say
it was because 75% of the directors had decided he should go.

Mr Jackson was then also told he was being removed as a director. He was
also asked to leave the meeting by hanging up the phone. He refused to do so
and he was then told that he was being given 24 hours' notice that he would
cease to be a director. An objection was also made on the grounds that seven
out of 11 directors did not represent 75% of the directors.

Mr MacSharry was then told he was also being removed. He objected on the
grounds that proper notice had not been given, that there was no proper basis
on which the other directors could remove him and that there was not a 75%
majority of the Board in favour. He was told that he was deemed to have
received notice and in 24 hours' time he would cease to be a director. Mr
McMahon was then called back on the line and told the same thing. These four
directors were then excluded from further meetings.

We have asked Mr Laffin to explain the legal basis on which the
exclusions took place but he has not been willing to do so on the grounds it
will disclose legally privileged information. We have explained that, in the
absence of an adequate explanation, Elpida does not accept that the removals
were valid and we have been advised that business transacted at a Board
meeting from which directors are deliberately excluded from attendance is
invalid and of no effect. We have engaged in correspondence but Mr Laffin has
not explained why the directors have been removed, other than to assert that
it has been done properly and to refer to the Company's announcement of
December 2009 where it is claimed that the exclusions were justified because
the four directors withdrew their responsibility statements while they waited
for Mr McGuire to reinstate his.

On its face, and in our view, it seems quite reasonable for a director to
ask what the issue is which has given rise to the withdrawal of a fellow
director's responsibility statement and see whether it can be resolved,
before he reinstates his responsibility statement. We are not satisfied that
this justified the exclusion of these non-executives. In our view, the
Statement to Shareholders issued by the Board on December 2009 does not
properly explain or justify the removal of the non-executive directors. We
have asked, in private correspondence, for further reasons and explanations
but these have not been provided.

The unorthodox appointment of Simon Laffin

The way in which Mr Laffin became Chairman was extremely unusual. His
appointment appears to have taken place at the Board meeting on 30 November
2009 after four of the non-executive directors had been excluded from the
meeting. We have been advised that this calls into question whether the
meeting, which continued after the four members of the Board had been
excluded, can be treated as valid. We have raised this issue in
correspondence but not had a satisfactory explanation. Mr Laffin responded
that it would not be appropriate to respond to the points raised in our
letter in detail given the submission made by the Company to the Panel.

Following this appointment, Mr Laffin entered into a new service contract
as Chairman. This was in spite of requests in writing from us to confirm that
the Company would not be entering into any new service contract with any
member of the Board. He now enjoys a salary at a rate that is five times
greater than he previously received. We do not think shareholders were
properly informed of this.

There is no Senior Independent Director to balance the powers of the
Chairman and answer concerns separately. This is in breach of the Combined
Code on Corporate Governance which requires the Board to appoint one, to be
available to shareholders if they have concerns.

Simon Laffin should not chair the AGM

The original appointment to the Board of Mr Laffin was unusual - his
appointment was announced on 19 December 2008, but with effect in January
2009 after the AGM had taken place. As a result he did not stand for election
by shareholders at the AGM. We have an opinion from Leading Counsel that, as
a result, Mr Laffin cannot be the chairman of the AGM as under the articles
he will cease to hold office once the AGM starts.

Simon Laffin's accusations about "working in concert"

Mitchells and Butlers plc under Mr Laffin has made very serious
allegations against us to the Takeover Panel of involvement in a concert
party with Joe Lewis. In an article in the Daily Telegraph dated 7 December
2009 those allegations were repeated and Mr Laffin was quoted as saying: "We
are not a gung ho board. It was a last resort but equally it was our duty"
and "The evidence is cumulative, weighty, documented and detailed." None of
these allegations were made to us before the complaints were made to the
Panel. They came as a complete surprise.

In a statement issued on 15 January 2010, after a detailed investigation
of the matters alleged, the Takeover Panel concluded that prior to 15
October, 2009, the time when the last relevant purchase of shares was made,
no agreement or understanding was reached between those shareholders to act
in concert for the purposes of the Code and, accordingly, that no breach of
the Code has occurred.

Instead of providing us with an apology, as, in the light of the Panel
ruling, we believe he ought to have, Mr Laffin has continued to treat Elpida
as being in concert with Joe Lewis. This is not the case. There is nothing to
investigate because there is not and never has been any concert party.

We have asked for a copy of the written evidence and submissions to the
Panel to be provided to us but Mr Laffin has declined to do so on the grounds
it will reveal allegations against other persons and he has been advised by
the Company's lawyers not to do so. We have offered to have him redact those
parts which relate to Elpida but that offer has not been accepted.

PR & Investigator costs

Mr Laffin appears to be retaining a PR company to launch an offensive
against shareholders and private investigator firms to sweep his home and
offices for listening devices while making ridiculous allegations of bugging
his home and office as evidence of shareholder interference. In addition
substantial costs have been incurred in making claims and submissions to the
Takeover Panel. Is this being paid out of Company or shareholder funds?

Connections with CVC

On 30 March 2008, Blackstone and CVC were reported as considering plans
to jointly acquire a significant minority stake in Mitchells & Butlers and
that it was also likely to see them demand changes at Board level. The next
change at Board level at the Company was the announcement on 19 December 2008
that Simon Laffin would be appointed to the Board, his appointment taking
effect after the annual general meeting on 29 January 2009.

Mr Laffin continues to be named on the CVC website as one of their people
and identified as their Industrial Adviser specialising in retail and
consumer services who started working with CVC in December 2004. In recent
correspondence we asked Mr Laffin to advise whether CVC have any current
continuing interest in the Company. In his reply he did not give a clear
answer to that question but said he had not been involved in any bid for
Mitchells & Butlers by CVC. The concern we have is that he is retained as an
advisor to CVC, a private equity house that has interests in acquisitions and
investments in the pub and leisure sector.

Request for Piedmont to commit not to pursue litigation

In our approach to these issues, one of the things which has concerned us
is that, in the compromise which Mr Laffin has proposed to Piedmont, he has
sought a commitment not to pursue or support any litigation against any of
the company's directors. We would ask how that is in the interests of the
shareholders. What proceedings is Mr Laffin talking about? This has not been
explained or justified.

Elpida wants a strong and independent Board of Directors

Elpida wants a strong Board with the objective of growing the business
for the future and a strong Board which will focus on investigating the
retrieval of some, or all, of the swaps losses. We believe that the new
independent directors being proposed are very experienced and will ensure
that the business is focused on driving operational outperformance and
creating value for all M&B shareholders in the future.

Elpida is a long term investor in M&B and a responsible shareholder."

The letter was prepared by E. Irwin, accredited representative for
Elpida Group Limited and signed on behalf of Elpida Group Limited.

Jim Milton, Murray Consultants Limited Mb: +353(862)558-400. Jonathan Clare, Citigate Dewe Rogerson Mb: +44(0)7770-321-881