Granada faces pounds 160m computer hit

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The Independent Online
Granada's interim figures in June will be hit by a pounds 160m write-off against the value of its computer services arm, which analysts believe will be the next non-core business to be sold by the TV and leisure group.

The group, headed by Gerry Robinson, has decided to take the exceptional charge this time because the unexpected success of the recent Welcome Break, Exclusive hotel and Alpha Airports stake sales means the hit will be more than offset by one-off profits. Analysts believe the sale could raise pounds 90m.

There is increasing speculation, meanwhile, that long-time supporter Mercury Asset Management is steadily selling shares in Granada having held a 13 per cent stake at one point.

The sale of MAM's stake in Forte was key to Granada's success in last year's pounds 3.9bn hostile bid.

MAM is known to have been unhappy at having such an exposed position in the leisure sector's largest stock and the drip-feed of its shares on to the market in recent weeks is thought to have been a big contributor to their rapid retreat from a recent high of 978.5p.

A company spokesman said the fall, which included a 24.5p tumble last Friday to 881.5p, reflected a correction after they had jumped recently in response to the sale of the Welcome Break chain of motorway service stations.

But dealers believe MAM is unwinding its position, with some speculating it is irritated at the way Granada's public denial of a bid for neighbour Yorkshire Tyne-Tees left it with burnt fingers in that stock.

The Welcome Break sale alone netted a pounds 142m surplus over book value and the Exclusive hotels to have been sold so far raised pounds 40m more than net assets.

The success of the recent deals, which have raised more than pounds 1.3bn to set against the pounds 3.9bn cost of the Forte acquisition, has taken some pressure off the group in its bid to find a buyer for its 68 per cent stake in the Savoy group of hotels. However, a deal is expected within the next few months following a move to clean up the Savoy's balance sheet with a hotel revaluation at the time of the group's recent results.

Granada said at the time of its bid for Forte that it would raise pounds 1.3bn from disposals by September 1997.

It is now certain to raise considerably more, having reached its target early without yet selling the Savoy stake, in the books at pounds 261m, or some of the smaller hotels in Forte's 17-strong Exclusive chain.

The planned sale of the computer division, which made profits last year of pounds 9m from its maintenance and disaster recovery services, is the latest move towards focusing the company on two main divisions - hotels and catering on the one hand and media on the other.