Savoy at risk in Forte bid battle

Forte, the hotels company battling against a hostile pounds 3.2bn takeover bid from Granada, yesterday pledged to redistribute all of its 68 per cent, pounds 200m shareholding in the Savoy group, making it a takeover target.

Leisure analysts said that the distribution among Forte's own shareholders would almost put the Savoy "in play." The reclusive Barclay brothers, who recently splashed out pounds 75m to buy the Ritz hotel in London, are tipped as likely buyers of the Savoy group.

Granada has also pledged to sell Forte's shareholding in the Savoy should it win the takeover fight. It is understood that "strong interest" has been shown in the shares by at least two possible buyers.

The share distribution formed part of a spirited and robust defence document published by Forte yesterday. The main plank of Forte's defence is a promise to increase this year's dividends by 21 per cent to 8.5p, and a pledge to increase payouts by 20 per cent in each of the next three years.

Analysts were divided over whether Forte had done enough to survive the assault from Granada, the ITV television and electronic rentals company. Some analysts said Granada would have to raise its bid by around 15 per cent to 380p a share to win.

Forte's shares closed 12.5p higher at 343p on the stock market yesterday.

Forte's defence, page 14

Comment, page 15.