Forte's defence bill could exceed pounds 35m

The besieged Forte hotels group is continuing to recruit more advisers, and looks set to run up a defence bill of more than pounds 35m in its struggle to defeat the hostile pounds 3.3bn takeover bid from Granada.

Since Sunday, Forte, headed by Sir Rocco Forte, has enlisted additional help from Roberto Mendoza, vice president of JP Morgan, and Cazenove, the blue-blood stockbrokers. Makinson Cowell, the investor relations specialists, was yesterday drafted into the defence team. One leading merchant banker, who requested not to be named, estimated the cost of Forte's army of defenders at a "conservative" pounds 35m. "That may well rise considerably if Forte remains independent and has to pay success fees," he said.

The defence team also includes two other merchant banks, SBC Warburg and Morgan Stanley, the UBS stockbroking firm, and Brunswick, the City public relations firm. The merchant banker reckoned that the merchant banks and stockbrokers would cost Forte between pounds 25m and pounds 30m, excluding expenses. "Accountants and solicitors would cost at least pounds 2m to pounds 3m. Brunswick pounds 1m, and Makinson Cowell another pounds 500,000." Forte is also having its hotel estate revalued which he estimated would cost around pounds 1m.

Forte declined to comment on how much its defence would cost. If pounds 35m is an accurate figure it equates to about 27 per cent of Forte's taxable profits of pounds 127m in the last full year.

IBCA, the credit rating agency, yesterday expressed concern about Forte in the wake of the company's plan to split into two should it defeat Granada. The agency said it had placed long and short-term debt ratings of Forte on ''rating watch'' with negative implications.

There were also widespread rumours that Forte's meeting with institutions in Scotland on Tuesday had not gone well. "We've heard that shareholders were unhappy that Forte had not seen them for months... and we also heard that one shareholder said Forte would be better off selling trophy hotels and investing the proceeds in gilts," said one City dealer.

Forte's shares fell a further 0.5p to 337.5p, while Granada advanced 2p more to 655p. That improved Granada's cash and share terms from 330.8p to 331.3p per Forte share - just 6.2p shy of the current market price. Analysts said that Forte would have to produce a "very strong" defence document to stem the negative tide.

Meanwhile, Forte continues to sell off unwanted businesses. The latest to go is Griersons, the wine merchant, sold to Matthew Clark for pounds 23m.

Granada chief executive Gerry Robinson pointed out that Griersons made only pounds 1m on turnover pounds 76m, compared with the pounds 5.3m Clark made from its Freetraders operation on pounds 121m turnover. "Before you sell a business you have to get operating profits up, otherwise you're selling on the cheap."

Mr Robinson also promised to retain Forte shareholders' perks. Gold Card hotel discounts would be honoured.

Start your day with The Independent, sign up for daily news emails
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
ebooks
ebooksA special investigation by Andy McSmith
  • 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: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence