Granada meeting fuels talk of rise in bid price

MATHEW HORSMAN

Media Editor

Senior managers of Granada were locked in meetings yesterday ahead of this week's crucial final stages of the hostile pounds 3.3bn bid for Forte.

The weekend session fuelled speculation in the Forte camp that Granada was planning to raise its offer - which it must do by tomorrow at the latest under Takeover Panel rules.

But Henry Staunton, Granada's finance director, speaking from a conference room at the company's London headquarters, said a final decision had not yet been made. "We still have a lot to go over, and it makes sense to do so without all the phones ringing."

A Granada spokesman also warned against reading too much into the Sunday meeting. Gerry Robinson, chief executive, who was in touch by telephone but not at work yesterday, "will have to make a decision in the next 24 hours", the spokesman said. "But remember, he is a very hard-nosed manager, and he knows what Forte is worth. If he is asked to pay more, or if the market seems to be demanding more than a realistic amount, he'll walk away."

City expectations of a raised bid centre on a range of between 360p and 380p a share, compared with the 327p value attached to Granada's initial cash-and-shares offer at market close on Friday. Forte shares last traded at 345p.

Meanwhile, the two camps continued to trade criticisms yesterday over the question of Forte's true value. Leisure analysts at Kleinwort Benson last week suggested that Forte's radical defence plan, which includes an pounds 800m share buy-back, the distribution of the company's shares in the Savoy group of hotels and the sale of its restaurant businesses to Whitbread for pounds 1.05bn, was worth 368p per Forte share.

However, Mr Staunton yesterday disputed the calculation, saying that, on Kleinwort's own assumptions and on the details contained in Forte's final defence document, the figure was 344.5p a share.

He also questioned Kleinwort Benson's contention that the share buy-back could be earnings-enhancing in the year ending January 1998.

Granada's decision is likely to be finely balanced. A raised bid of less than 360p a share is unlikely to secure shareholder support, analysts said. Only an offer close to 380p would be considered a knock-out bid.

But an offer as high as that would be difficult to justify to their own shareholders, Granada insiders conceded.

If it raises the stakes, Granada is expected to publish a detailed analysis of Forte's restaurant and hotel businesses, showing how it could achieved a promised pounds 100m in enhanced profitability. The plan is based on achieving costs savings through centralised purchasing and reduced overheads, and on introducing a new pricing regime at Forte's Little Chef and Happy Eater roadside restaurants. It also plans to increase room rates at Forte's budget Travelodge and mid-market Posthouse hotels.

A meeting with analysts is likely to be scheduled to discuss the profit plan, but only if a higher offer is unveiled.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
tech

Apple has been hit by complaints about the 1.1GB download

Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

PROMOTED VIDEO
Arts and Entertainment
Actor and director Zach Braff
tv

News
i100
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Arts and Entertainment
tv

News
i100
Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of the Jane Austen classic - with a twist

News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Lionel Messi in action for Barcelona
filmWhat makes the little man tick?
Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
Life and Style
i100

Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
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

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week