Sheraton's Ciga move upsets Forte plan

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FORTE'S plan to take control of Ciga, the down-at-heel chain of five- star European hotels, was upset yesterday when its creditors agreed to accept a much higher 11th-hour bid from Sheraton, the hotels division of ITT, the US conglomerate.

Sheraton - whose pounds 375m bid is 50 per cent higher than the pounds 250m offered by Forte and its partner, George Soros - was not even on the short-list of suitors being considered by Ciga's bankers last week, having withdrawn from the process late last year.

Forte, which signed an agreement in principle with the creditors last October, was in the final stages of conducting due diligence on the 35-hotel chain, owned until recently by the Aga Khan and including such landmarks as the Danieli in Venice, the Hotel Meurice in Paris and the Palace in Madrid.

But over the weekend, Mediobanca, the Italian merchant bank handling the sale, was approached by Sheraton with the unexpected offer. Forte declined to match it, a spokesman said.

The hotels have been losing money even before making payments on Ciga's pounds 500m debt, prompting the Aga Khan to walk away from the group two years ago. Analysts say a turnaround of the pounds 250-a-night hotels will be difficult and expensive, requiring an immediate investment of at least pounds 25m to restore their former glory.