A ROW in the City is brewing over plans by Forte, the hotels group, to sell its Gardner Merchant contract catering offshoot to a management buyout consortium.
Well-placed industry sources say a deal with the management is imminent despite the existence of substantially higher offers from other sources. The debt element of the offer is being underwritten among bankers in the City.
Several institutional shareholders are concerned that the business is about to be sold at what they consider to be an undervalued price.
Both Sir Anthony Tennant and Sir Paul Girolami, newly appointed as non- executives to the Forte board, are expected to be pressed to vet the deal to make sure it is the best on offer and in shareholders' interests.
There are four rivals to the management consortium - Sodexho of France; the Compass contract catering group; KKR, the US leveraged buyout specialists; and Granada, the leisure and TV group. At least one is believed to have put in a bid that substantially betters the management proposal.
At this stage it is unclear why Rocco Forte, who is taking over from his father, Lord Forte, as chairman of the group, should want to sell for an apparently lower price.
Gardner Merchant is believed to be worth between pounds 400m and pounds 500m. The management buyout proposal excludes the group's substantial airport and airline catering interests.
The appointment of Sir Anthony and Sir Paul, both highly respected in the City and wider business community, was intended to defuse City criticism of Forte, which has centred on the family-run nature of the company.
However, there is widespread City concern that the appointments did not go far enough. Many institutions want to see a new chief executive brought in from outside the group.
Robert Peel, presently chief executive of the successful Mount Charlotte hotels group, is believed to have turned down an offer of the post.
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