Offers for assets pour in to Granada
Monday 15 January 1996
Granada, the television and leisure giant, has been inundated with offers for the assets it intends to sell if it wins a pounds 3.8bn hostile bid for Forte, the hotels and restaurants group.
According to sources close to Granada, "the interest is huge and we have been overwhelmed by inquiries." At least six serious buyers have emerged for Forte's motorway service areas, of which two are believed to be management buy-out groups. Granada expects between pounds 250m and pounds 300m for the operations. Bids for Forte's upmarket hotel chains, Meridien and Exclusive, are also believed to have been proposed by trade buyers, including Bass, ITT-Sheraton and Marriott.
But sources denied reports that Accor, the French hotels and travel company, was in the late stages of agreeing a pounds 1bn deal to buy a package of Forte hotels from Granada if the hostile bid succeeds.
"Certainly Accor is in the frame," said one source. "But at this stage, nobody is ahead of anybody else." Accor was a competing bidder to Forte for Air France's Meridien chain in 1994, but offered less than Forte's pounds 240m. An announcement of an agreement this week, in advance of the 23 January bid close, would be "icing on the cake," a Granada spokesman conceded yesterday. "But that is very, very unlikely."
An agreed deal at a good price would be enough to clinch Granada's offer for Forte, analysts said. The bidder is already tipped to have done enough to secure victory, following its raised offer last week. But there are still doubts about its pounds 2bn disposal programme.
Forte has dismissed the plan as a fire-sale. Granada hit back yesterday, calling on Sir Rocco Forte, the chairman and chief executive, to justify his own asset sales, which include the sale for pounds 1.05bn of Forte's restaurants and Travelodge hotels to Whitbread.
Following the acquisitions, Forte would be "over-exposed to a sector of the hotel market which is highly cash consumptive and vulnerable to a downturn in the economy," Granada's chief executive, Gerry Robinson, said. "I have no doubt that 'new' Forte shares would trade at a substantial discount" to the Granada offer, he said.
Forte responded that its "pure hotels company" would benefit from the upturn in the hotels cycle that is now under way.
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