Despite securing the departure of the Savoy's anti-Forte managing director, Giles Shepard, yesterday, his proposals for a joint management agreement between Forte and the Savoy are in trouble.
The proposed deal, which could give Forte effective control of the Savoy's hotels, including Claridge's and the Connaught, ran into stiff opposition at a secret meeting of trusts controlled by the family of the former Savoy chairman, Sir Hugh Wontner.
At the meeting last Friday it is understood that Sir Hugh's widow, Lady Wontner, was overruled by her two sons after supporting the Forte proposal.
Any deal would need to compensate holders of the Savoy's high-voting 'B' shares whose investments have been buoyed by speculation that Forte would launch a bid for the company after a 13-year waiting game.
The voting rights of the 'B' shares, devised 40 years ago to stave off another takeover threat, mean that despite owning more than 60 per cent of the ordinary shares Forte controls only 42 per cent of the votes.
Today's meeting is almost certain to result in the appointment of Sir Ewen Fergusson, the former British ambassador in Paris, as interim chairman of the Savoy.
It is understood that Mr Forte has abandoned hopes of persuading the rest of the Savoy board to back his first choice for the chair, Sir Michael Richardson, outgoing chairman of Smith New Court.
Mr Shepard's resignation follows a highly publicised row with the rest of the Savoy board after he produced an anti-Forte dossier and then accused Sir Michael of leaking its details to the press.
He authorised a press release condemning the leak but had to retract the statement after the board rallied round Sir Michael.
Mr Shepard said: 'Over the past few months discussions have taken place between our major shareholders regarding the future of the company. I have not found myself able to concur with what is proposed. Accordingly, I have been asked to resign.'
Mr Shepard's position at the Savoy had been weak for some time because of the group's deteriorating financial position. Last year profits were only pounds 725,000 from sales of pounds 83.3m. In 1992 the group fell into the red.
Mr Shepard's replacement will almost certainly be Ramon Pajares, general manager of the Four Seasons hotel chain. He is negotiating a salary package with the Savoy board and an announcement is expected within a week.Reuse content