Granada raids Forte shares

MATHEW HORSMAN

Granada yesterday bet almost pounds 400m that it would win the acrimonious battle for Forte, the hotels group. Around mid-morning it waded into the stock market snapping up 9.2 per cent of its prey.

The manoeuvre was seen by analysts as further indication that the television and leisure company was poised to clinch the battle.

One analyst said: "With the shares now held by institutions friendly to Granada, this looks like the bid is pretty much decided." Mercury Asset Management, which holds 15 per cent of Forte, is believed to be preparing to tender its shares to Granada. Other institutional shareholders were last night also leaning towards accepting the hostile offer.

Forte dismissed the share purchase, calling it a "desperate attempt to restore momentum to its misguided bid." Sir Rocco Forte, the chief executive, said: "Granada has yet again shown its true colours by favouring certain shareholders over others."

But Granada denied that it had given preference to certain buyers, claiming that its was "an open offer, and no one was given privileged position".

Analysts said only a radical move by Forte would now allow the company to escape with its independence intact. Among the possible last-minute defence strategies, the company was believed to be discussing the sale of one or more "trophy" hotels and to be holding out for a higher offer from Whitbread for its restaurants and budget hotels businesses, which the brewer has contracted to buy for pounds 1.05bn if the Granada bid fails.

Analysts said a higher bid would be hard to achieve, as Whitbread would have to convince its shareholders that a premium offer made sense.

Yesterday's dawn raid had been expected to accompany the unveiling of Granada's increased offer last week, but failed to materialise. Under Takeover Panel rules, Granada is allowed to buy up to 9.9 per cent of Forte shares, at prices up to but not exceeding the value of its cash- and-shares offer of 386p.

It can make additional purchases of up to a total of 29.9 per cent of Forte's shares at prices no higher than its all-cash offer of 362p.

A Granada adviser confirmed that the company had stopped short of buying the total amount available to it. "We wanted to leave ourselves some flexibility for the future."

According to sources, some of Forte's traditional institutional supporters were among those shareholders selling out yesterday, as volumes soared to more than 160 million. Market-makers and arbitrageurs were also among the sellers yesterday, according to dealers.

Separately, the Department of Trade and Industry confirmed yesterday that Granada would have to sell Forte's motorway services areas, branded as Welcome Break, if its bid succeeded, and said it would accept an undertaking to that effect in lieu of a referral to the Monopolies and Mergers Commission.

Granada's chief executive, Gerry Robinson, said: "We said at the outset that we recognised the potential competition issues involved and we therefore volunteered to dispose of all of Forte's motorway service areas."

Following Monday's announcement that Sir Rocco would split the roles of chairman and chief executive, Forte yesterday appointed John Hoerner, chief executive of Burton Group, as non-executive director. Sir Anthony Tennant's appointment as non-executive chairman was announced on Monday.

Following yesterday's hectic trading, Granada closed up 23p at 693p, just below its share price prior to launching the bid in November. Forte closed 14.5p higher, at 380.5p.

News
peoplePaper attempts to defend itself
Voices
voicesWe desperately need men to be feminists too
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
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

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Syria air strikes: ‘Peace President’ Obama had to take stronger action against Isis after beheadings

Robert Fisk on Syria air strikes

‘Peace President’ Obama had to take stronger action against Isis after beheadings
Will Lindsay Lohan's West End debut be a turnaround moment for her career?

Lindsay Lohan's West End debut

Will this be a turnaround moment for her career?
'The Crocodile Under the Bed': Judith Kerr's follow-up to 'The Tiger Who Came to Tea'

The follow-up to 'The Tiger Who Came to Tea'

Judith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed' - which has taken 46 years to get into print
BBC Television Centre: A nostalgic wander through the sets, studios and ghosts of programmes past

BBC Television Centre

A nostalgic wander through the sets, studios and ghosts of programmes past
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum