Forte splits top jobs to fend off Granada

Bid battle: Sir Anthony's promotion to non-executive chairman 'not too little, too late'

DAVID HELLIER

Forte, the hotels and restaurants group trying to fend off a pounds 3.8bn hostile takeover bid from Granada, the television to leisure group, yesterday responded to shareholder pressure and agreed to separate its top two jobs in an attempt to retain its independence.

Forte announced that its deputy chairman, Sir Anthony Tennant, will be promoted to non-executive chairman from 1 February. Sir Rocco Forte, the current chairman and chief executive, will drop his chairman's role.

The move comes eight days before the bid timetable comes to a close and ends a three-year period during which Sir Rocco, son of the company's founder, Charles, held the posts of chairman and chief executive.

Sir Anthony rejected suggestions that the move was too little, too late. "We had not seen this as an issue until recently, but in the past few days our stockbrokers [Cazenove and UBS] said that it was and we have acted in response to what we understand a number of our shareholders wanted."

Some shareholders are believed to have wanted a more extreme change, perhaps backed by the appointment of a new chief executive. But Sir Anthony said Sir Rocco had "tremendous experience" and a fine three-year record as chairman and chief executive. "To have taken him off from his position as chief executive would have been a positive mistake," he said.

Gerry Robinson, Granada's chief executive, was predictably dismissive of the management reshuffle. "This amounts to nothing more than a titular change - Sir Anthony Tennant has been deputy chairman for the last three years and Sir Rocco has been chief executive for 13 years. Forte's performance during those 13 years speaks for itself."

Granada claimed that in the 13 years during which Sir Rocco had been chief executive, Forte's return for investors had been dramatically less than Granada's in the period since late 1991 when the current management team was installed. Granada says that over the five years prior to its takeover offer, Forte ranked 86th out of the FT-SE 100 while Granada ranked fifth.

Mark Finnie, an analyst following the bid for NatWest Securities said the management move "probably wins a degree of support from certain of the funds" that hold Forte shares. But it was not the move that some people wanted.

Mr Finnie thought the result of the takeover battle was still in the balance. "I think it will be very close. I don't think Forte would have made the moves if they did not think that they still had a chance of winning through, but I don't think they have too many aces left up their sleeve." Sir Anthony Tennant, who is 55, said he would take over the leadership of the company's board and be directly responsible for answering to shareholders. Sir Rocco will continue to manage the daily operations of Forte's business.

Sir Anthony's other commitments include a non-executive chairmanship at Christies, the auction house. He is also a non-executive director of GRE, the Savoy and Banque Nationale de Paris, and is an adviser to Morgan Stanley, the US investment house.

In a separate development Forte released a new document to shareholders aimed to set out the achievements of the management team at Forte and question's Granada's claim that it can make pounds 100m of profit improvements from the businesses it plans to retain.

In another development, Accor SA, the world's fourth-largest hotelier, denied speculation it had already agreed to pay Granada pounds 1bn for the Meridien hotel chain if Granada's bid is successful.

Meanwhile, Whitbread was said to be visiting City institutions. There was speculation that the group was gauging opinion for a possible lift in its pounds 1.05bn offer for Forte's Happy Eater and Little Chef restaurant chains.