Granada piles on the pressure

Battle for Forte: Robinson will discuss terms with key shareholder group

JOHN SHEPHERD

and MATHEW HORSMAN

Gerry Robinson, chief executive of Granada, is to meet with the Hon. Hugh Astor, chairman of the powerful Forte Council, next week, to discuss terms of Granada's pounds 3.3bn hostile bid for the hotels operator.

The Council holds just 780,000 shares but 50 per cent of all votes, and its view may be key to the outcome of Granada's bid.

Meanwhile, the official 60-day takeover clock started ticking yesterday, with the release of the formal offer document just two days after Granada made its hostile pounds 3.3bn move against the largest hotels group in the UK.

Analysts said the swift publication clearly signalled Granada's intent to pile on the pressure, giving Forte as little time as possible to mount counter action. Companies can wait up to 21 days after making a bid before releasing the formal offer document. According to that document, Mr Robinson sold 270,800 shares in June, pocketing pounds 1.2m.

Confidence at Forte remains high despite the onslaught by Granada, and there is a growing consensus that Forte's prime planks of defence will be a firesale of assets and an acquisition of an international hotels group to bolster the Meridien chain it bought earlier this year.

"We are looking at all at the options... we ain't going to be short of ideas." a Forte spokesman said. "We don't think the offer document really adds anything."

The spokesman attacked Granada's financial performance. "In the last two years we have grown earnings per share by 248 per cent and he's grown Granada's by 53 per cent."

Forte's shares fell 5p to 346p yesterday, but still remain above the value of the four for one share swap and pounds 23.25p cash being offered by Granada. Shares in Granada slipped 2p to 651p, making the value of its offer worth 328.6p per Forte share.

Yet more attacks were launched by the Granada camp. Mr Robinson lambasted Forte's financial record under Sir Rocco Forte, and spelt out in detail how he could extract greater profits from the hotels.

"Forte is viewed as being a high-class hotel company. It isn't. It makes most of its money from mid-market hotels and motorside restaurants. So it makes a lot of sense for Granada to be interested.

"There are many small things we can do to create value. Something as simple as getting Granada's rentals division to supply the television equipment for hotels." Mr Robinson added: "Branding is very much part of our approach. That is why we want to develop the Meridien chain, and to make two strong brands in the mid market."

Sir Rocco says Mr Robinson knows nothing about the business, and has made his bid two years too late. "The closest Mr Robinson gets to marketing is his big mouth," he said.

Some analysts also have yet to be convinced by Mr Robinson. One said: "He has said nothing about information technology... You can't run an international hotel booking system, let alone compete, without pumping millions into technology."

Mr Robinson said that he was well aware of the importance of IT: "You need sophisticated systems not only to track reservations but to track revenues per room and other measures. You can know everything you need instantaneously." Robinson on Forte These assets have been under-managed and the company has performed poorly, that is clear.

I guess he was really surprised by this. I hear he had to come back from pheasant shooting. I get invited on pheasant shoots all the time. I just can't stand the idea of doing it.

I think it highly unlikely that Rocco would want to stay with the company in the event of our offer being successful.

Of course he has taken this badly. He's upset about it. We'll have to wait until things settle down a bit.

I've played golf with him a few times. I like him. But this is not a personal thing. Forte on Robinson He knows nothing about this business.

He has no skills to run a hotels business.

The closest Mr Robinson gets to marketing is his big mouth.

He is two years too late in making a bid. ... he is also two years too late in making the remarks he has made about the company.

He is not saying anything new about our business. We've restructured this business over the last three years. There is huge profit improvement available to us.

The market for trophy properties is improving all the time. If we came out two years ago it would have been a mistake.