Forte is paying Fr540m ( pounds 64m) for the French company Sogerba, which operates 52 motorway restaurants and four hotels. It is also injecting pounds 9m into a 50/50 joint venture with Agip of Italy to manage 18 hotels and nine motorway restaurants. A further 24 hotels and 33 restaurants may be added.
Forte preferred the Gardner management offer backed by CINVen and Bankers Trust to a rival pounds 527m bid from Compass Group for Gardner plus Forte Airport Services. It also rejected an expression of interest from Granada Group.
Gardner managers led by Garry Hawkes will take an initial 8 per cent of the equity, rising to a maximum of 20 per cent if they beat performance targets.
CINVen, the venture capital arm of the British Coal pension fund, leads the equity syndicate, which includes Charterhouse, Candover and Prudential. Banks led by Bankers Trust are lending pounds 220m of senior debt.
Forte will receive pounds 342m in cash, pounds 29.6m in deep discount bonds, pounds 28.6m in redeemable preference shares and pounds 1.9m in ordinary and convertible shares representing 24.8 per cent of the buyout. Forte shareholders are due to vote on the deal at an extraordinary meeting on 23 December. Gearing will fall from 45 to 34 per cent.
Richard Kilsby, managing director of Bankers Trust, said the deal marked 'the reopening of the senior debt market for large deals'.
Chris Beresford, head of the MBO section of KPMG Peat Marwick, said the return of foreign banks, including Fuji Bank, Societe Generale and Bank of Nova Scotia, to MBO financing was very interesting: 'I think it's highly likely we'll see more big deals in the coming year.'Reuse content