Hotel giants jockey for Savoy takeover

Three of the world's biggest hotel chains are jockeying for position to mount a takeover bid for the Savoy group, valued at almost pounds 400m on the stock market, regardless of the outcome of Granada's titanic bid battle for Forte, writes John Shepherd.

The three companies, all American, are ITT Sheraton, Hilton Hotels Corporation and Marriott. It is understood that approaches have been made to Granada, which stands to inherit a 68 per cent holding but limited voting stake in the Savoy if it gains control of Forte.

Moreover, it is also understood that the Savoy executive committee, comprising main board directors and formed when Granada launched its bid, have discussed possible takeover offers at recent meetings.

However, the proposals include diluting the holdings of the Wontner family trusts, which have voting control through their 'B' shares. Sources said the proposals had been received coldly by Wontner family members.

Hotel industry sources added that a "bullish" profit forecast is about to made by the Savoy group which, besides owning the famous hotel of the same name in the Strand in London, encompasses the Berkeley, Claridge's, the Connaught, and the Lancaster hotels.

The profit forecast will be for the financial year that has just finished, calendar 1995, and will be released when Granada, as is expected, increases its offer for Forte. Annual results are normally announced by the Savoy in April. The Savoy declined to comment.

Forte has still not ruled out considering an offer for its entire shareholding in the Savoy despite this week's promise to distribute the shares to its own investors if it remains independent.

Sources close to the company said "tentative" approaches had been made about the stake, but no "concrete" proposals had been made before the share distribution plan was announced on Tuesday.

Forte yesterday left the door open to possible buyers for its Savoy shares. Richard Power, director of public affairs and in line for a full boardroom post, said: "If somebody makes us an offer that is better value to shareholders than the distribution then we would have to consider it."

Hotel analysts said yesterday that talk of a takeover strike for the Savoy were gathering momentum. Any buyer of the Forte stake would have to mount a full bid under Rule 9 of the Takeover Code.

The Savoy group, despite benefiting from the tourist boom in London this year, misses out on the big gains that would arise from being part of an international group - particularly marketing. Large international chains are making big gains in market share.