Sir Rocco burns the midnight oil preparing Forte's defence


Sir Rocco Forte spent last night locked in meetings with his legions of financial advisers burning the midnight oil, preparing the Forte hotel company's crucial day-39 defence document.

Its release today will set the clock ticking on the most important week in the company's fight for survival against the hostile pounds 3.3bn takeover bid from Granada, which only has one week left in which to decide whether to increase its bid terms.

There is intense speculation that Forte's final release of fresh financial information today will be built around retaining shareholder loyalty. This may involve paying a one-off 50p dividend from half of the pounds 1.05bn proceeds from the proposed sale of its Happy Eater and Little Chef roadside restaurants to Whitbread. The money may also be used for a share buy-back - or a combination of the two.

The document, a Forte spokesman confirmed, will detail how Forte intends to use the proceeds from the Whitbread deal as well as the pounds 200m reaped from other recent disposals, which include the US Travelodge hotel chain and Lillywhites.

Forte yesterday signalled it intends to come out fighting hard, by firing off a seven-point missive, questioning Granada's logic in launching a highly-leveraged takeover bid.

The missive said: "Granada's grossly inadequate bid repeats the mistakes of the highly-leveraged 1980s conglomerates."

And it asked: "Doesn't pounds 3.6bn of pro forma debt and 207 per cent of pro forma gearing increase the business risk to unacceptable levels?"

Charles Allen, chief operating officer and soon to be chief executive of Granada, dismissed the attack. Forte had said this all before and was making the same mistake again of trying to compare the company with diversified industrial groups.

"Granada is very firmly in the leisure sector, so are Forte. We know exactly what we are going to do here," he said, promising that more detailed plans would be released in the next couple of weeks showing Granada's strategy for sweating more from Forte's assets.

He also further questioned the value of the deal with Whitbread for Forte shareholders. "It does not enhance shareholder value in any way. We believe the Whitbread deal is the biggest own-goal they have had."

As for the question of the company's soaring ratio of debt to shareholders' funds should it win the bid, a Granada spokesman said Forte had failed to state the real figure, which was much lower.

He added that Granada's 10 per cent holding in BSkyB, the satellite television company, was in the books at pounds 65m, significantly below the market value of pounds 700m. Granada also intends to bring debts down by selling parts of the Forte empire, principally the pounds 200m investment in the Savoy hotels group and the Welcome Break motorway service stations.

Forte is believed to be lining up more disposals of non-core assets. These include the 68 per cent limited voting stake in the Savoy group.

Further details may be released today of how Forte intends to distribute the Savoy shares among investors. Calculating the worth of the shares for investors is difficult because of the two-tier voting structure, which is heavily tilted in favour of the Wontner family trusts which own a large part of the key Savoy 'B' shares.

It is understood that some Savoy directors privately favour enfranchising the limited voting 'A' shares, and may be prepared to table a formal proposal at a board meeting in the next few months. Another non-core asset owned by Forte is a 25 per cent stake in Alpha Airports, the in-flight catering and airport retailing group floated two years ago next month.

Pro-Russia rebels guard a train containing the bodies of victims of the Malaysia Airlines flight MH 17 crash in Torez, Ukraine
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
Arts and Entertainment
<p>Troubled actor Robert Downey Jr cements his comeback from drug problems by bagging the lead role in Iron Man. Two further films follow</p>
filmRobert Downey Jr named Hollywood's highest paid actor for second year running
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
The Commonwealth flag flies outside Westminster Abbey in central London
Arts and Entertainment
Struggling actors who scrape a living working in repertory theatres should get paid a 'living wage', Sir Ian McKellen has claimed
Skye McCole Bartusiak's mother said she didn't use drink or drugs
peopleActress was known for role in Mel Gibson film The Patriot
Arts and Entertainment
tvWebsite will allow you to watch all 522 shows on-demand
Arts and Entertainment
filmThe Rock to play DC character in superhero film
Arts and Entertainment
Damon Albarn is starting work on a new West End musical
artsStar's 'leftfield experimental opera' is turning mainstream
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Paul and his father
artsPaul Carter wants to play his own father in the film of his memoirs
Ben Stokes trudges off after his latest batting failure for England as Ishant Sharma celebrates one of his seven wickets
Arts and Entertainment
Members of the public are invited to submit their 'sexcapades' to Russell T Davies' new series Tofu
Sky's Colin Brazier rummages through an MH17 victim's belongings live on air
Arts and Entertainment
Keira Knightley and Benedict Cumberbatch star in the Alan Turing biopic The Imitation Game
arts + ents'The Imitation Game' stars Benedict Cumberbatch and Keira Knightley
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Project Manager - ETRM/CTRM

£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...

Day In a Page

Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor