Gardner offer reviewed by Forte

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The Independent Online
Forte, the hotels group, said yesterday it was giving careful consideration to the £550m takeover offer being made for Gardner Merchant, Europe's biggest contract caterer, by Sodexho, the French catering and leisure group.

However, a spokeswoman for the British hotels group, which retained a near-25 per cent stake in its former subsidiary when it agreed a £402m management buyout of Gardner in 1992, said: "Although we have always said we were looking for an opportunity to liquidate that stake it is a decision for the Gardner Merchant board" (on which Forte has one representative). Forte said a further announcement would be made when talks had been completed.

Gardner's directors, led by Garry Hawkes, chief executive, were unavailable for comment. The City's reaction was that the price being offered by the French - which rises to £730m when the assumption of £180m of net borrowings is included - was reasonable.

But the consensus was that the outcome of the offer would be decided by the views of the management buyout team and its venture capitalist backers rather than pressure from Forte. A planned flotation of Gardner last year was shelved due to uncertain stock market conditions.

Peter Joseph, leisure analyst at Peel Hunt, said: "The French are offering a reasonable price but the whole thing depends more on Gardner's managers rather than Forte. I think Forte has to decide whether it wants the cash now or whether it feels an eventual flotation of Gardner will give it a better deal."

Martin Ainscough, at Nomura, said Sodexho's offer was a fair price and that the companies were perfectly suited.

The price values Forte's holding in the contract caterer at £140m - 75 per cent above its book value.

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