Forte restaurant sale could thwart bid

Granada is set to come under intense pressure this week, as its bid target, Forte, pushes ahead with plans to sell off its restaurant business to Whitbread, the food and drink giant, for nearly pounds 1bn.

The sale, which insiders at Forte yesterday confirmed could come within two weeks, has emerged as the key plank in Forte's controversial defence against Granada's unwanted pounds 3.3bn bid.

A deal with Whitbread could complicate the Forte bid situation dramatically. Any sale would have to be put to shareholders, and that might not be possible before the crucial day 39 of the bid period, after which fresh financial details cannot be published. It is also possible that Granada may ask the Takeover Panel to intervene.

Granada had no comment last night. A spokesman suggested that "this might not be the best time to be selling assets, where your arm is twisted behind your back". He said, however, that the company would wait for further details on the proposed sale.

Granada had planned to keep the restaurant business, largely made up of the Happy Eater and Little Chef chains. Forte operates 26 roadside service sites, branded as Welcome Break, and a network of 55 sites in France, under the Cote France brand.

If a deal with Whitbread is reached, Granada will have to hope Forte shareholders withhold their authorisation, and choose instead to accept the television and leisure company's hostile bid. But for that to happen, Granada is likely to have to up its offer, perhaps by as much as pounds 600m.

Forte's radical defence, which would leave it with its hotel operations, had been given a mixed reaction in the City. But analysts concede the demerger plan is clever, as it could remove from the equation the very assets - namely the restaurants - that attracted Granada's attention in the first place.

A sale of the restaurant operations would substantially reduce Forte's debts. The company is also working on disposing of its chain of White Hart hotels, and last week confirmed the sale of its US Travelodge hotels for pounds 114m.

Granada's offer has been justified by its chief executive, Gerry Robinson, on the grounds that the Forte assets had been badly managed, and that Granada could release shareholder value. He and his executives have promised to improve Forte's profits by pounds 100m a year.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power