6C prepares for climbdown on demerger vote

Six Continents is preparing to climb down over a crucial shareholder vote to approve the demerger of its pubs arm, citing a technicality that emerged yesterday.

The leisure group, which is fighting off a hostile £5.6bn takeover bid from the entrepreneur Hugh Osmond, claimed that a shareholder vote in favour of its proposed demerger would not necessarily prevent it from ceding to an "attractive" offer.

Tim Clarke, the chief executive, said the final date to cement the group's plans was not next week's extraordinary shareholders' meeting but 14 April, the date the court would finally approve the so-called scheme of separation. "No option need be or should be closed down as a result of a favourable vote behind the demerger," he said.

"Between the 12 March [extraordinary shareholders' meeting] and 14 April, Six Continents' board would be quite prepared to withdraw the scheme from the court if an attractive offer was put to the board," Mr Clarke said.

Several Six Continents shareholders have lobbied for the board to delay next week's meeting. "There is nothing to be lost from an adjournment," one large investor said. "If CMI [Capital Management & Investment, Mr Osmond's bid vehicle] can achieve an adjournment, they can possibly offer more cash and come up with a buyer for the trophy hotels. Then they would stand a reasonable chance."

While CMI's offer is conditional on the demerger being voted down, it emerged yesterday that it could get round a vote in favour of the separation next week thanks to a technicality that requires shareholders to vote separately on April's court meeting. Six Continents needs a simple majority of shareholders to support the demerger at the EGM but more than 75 per cent to back the separation for the court meeting to go ahead.

In a letter posted yesterday to its shareholders, Six Continents said a vote for the proposal on 12 March closed off "no options".