Forte set to announce White Hart hotels sale

Endgame: Last-ditch attempt to stave off hostile takeover dismissed by Granada
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The Independent Online


Forte was poised last night to announce the imminent sale of its White Hart hotel chain for pounds 125m in a last-ditch effort to see off the hostile pounds 3.9bn bid from Granada.

Industry sources said negotiations were at an advanced stage and confirmation could come on the weekend. A Forte spokesman said: "It is our stated intention to sell the White Hart chain. We do not comment on market rumours. Any announcement will be made through the appropriate channels at the appropriate time."

Meanwhile, Sir Rocco Forte, Forte's chairman, said last night he had spent pounds 14.7m on 3.9 million Forte shares, at 376p each. His holding represents about 1.8 per cent of the company.

An attempt to sell the 72 White Hart hotel properties failed last year when the two sides could not agree over price. A management group is believed to be favoured as buyer.

One analyst said a price of pounds 125m was at the high end of estimates, and could provide Forte with support in its bid to remain independent.

But most observers continued to believe that Granada had the edge. "It will take more than one deal at this late stage to swing the odds in Forte's favour," one analyst said. Granada dismissed the prospect of a White Hart sale. "No doubt Sir Rocco has a few rabbits to pull out of his hat," Charles Allen, chief operating officer of Granada, said. "But if they do anything at all, they will be selling with their backs up against the wall."

There was also speculation that Whitbread would announce an increased bid for Forte's restaurants and budget hotels, which is dependent on the failure of Granada's offer.

Peter Jarvis, Whitbread's chief executive, is scheduled to meet Carol Galley, head of Mercury Asset Management, on Monday. MAM is the largest shareholder in Forte and Granada, and is also a large owner of Whitbread shares.

Ms Galley discussed the bid with Gerry Robinson, Granada's chief executive, yesterday morning, while Sir Rocco met her in the afternoon. MAM is seen as holding the swing vote.

Meanwhile, Granada received the support of one of the City's leading independent houses, Kleinwort Benson, which recommended the cash-and-shares offer. Analysts Paul Slattery, Greg Feehely and Michael Savage said: "There is less risk for Forte shareholders in accepting the immediate value on offer from Granada."

Kleinwort Benson suggested before Christmas that Forte was worth about 380p a share. Since then, the strength of Granada shares has lifted the value of its bid to about 386p a share. But the analysts warned that Granada's bill, including pounds 50m paid to the Council of Forte and pounds 300m in "potential loss of value on asset disposals," raised the bid costs to about pounds 1 per Granada share.