One of the most contentious issues in the pounds 3.3bn hostile bid by Granada for Forte was left hanging in the air last night, following a High Court ruling that the Council of Forte could make up its own mind about how to bid its 50 per cent voting stake.
According to the ruling, the council - which holds just 0.08 per cent of the shares but half the votes - can accept or reject the Granada offer, or it can step aside and let ordinary shareholders decide Forte's fate.
It was widely speculated, however, that the Takeover Panel would force the council onto the sidelines if it decided on anything but neutrality. Granada is planning to seek additional guidance from the panel.
eanwhile, Forte yesterday strengthened its still-tenuous defence by announcing it had raised a net pounds 108m from the sale of its US Travelodge hotel chain -- just ahead of most expectations. The deal, which brings to pounds 1.1bn the sum that Forte has raised from disposals, came as the troubled negotiations for the sale of the White Hart hotel chain failed to rekindle. Forte said the talks, which stalled when a financing partner in the purchasing group bowed out, would resume in the new year.
Analysts said Forte's refusal to accept a sharp reduction in the sale price of the White Hart chain was an encouraging sign that the company would not engage in a fire sale of assets.
Forte, headed by Sir Rocco Forte, trumpeted the sale of the Travelodge properties to HFS, the economy hotel franchising company, as proof it was managing the company effectively.
Granada responded that the disposal came after several years' of investment in the chain, and that the price might have been higher had Forte waited. "This is not necessarily the best time to be selling these assets," an insider said. Analysts were likewise concerned that the White Hart sale was coming at a bad time. "There are plenty of similar assets on the market," one analyst said.
The battle is expected to continue in the new year, with both sides jockeying for advantage. Analysts said yesterday that Granada would have to raise its initial offer to win.
In addition, there were signs in the City of frustration with what one analyst called Granada's "sound bite" campaign. He claimed that the company did not provide adequate detail of its plans to cut up to pounds 100m out of Forte's annual costs, and that it wrongly characterised Forte's cost structure.