Deadline looms for Granada in decision on raising Forte bid
GERRY Robinson, chief executive of Britain's broadcast and leisure Granada Group, spent the weekend considering the future of his company's hostile bid for Forte plc.
Granada has until tomorrow to raise its £3.3 billion sterling offer for the family-run Forte empire, Britain's biggest hotel company. The offer's closing date is January 23rd.
Granada appeared certain to win the battle when it launched its surprise offer in November.
Forte chairman Sir Rocco Forte hurriedly cut short a shooting trip to northern England after learning his company was a target.
But Forte has mounted a spirited defence campaign, announcing plans to sell its restaurants and budget hotels to brewing and leisure company Whitbread for £1.05 billion sterling and, to plough much of the proceeds into a share repurchase scheme,
Mr Robinson, a genial Irishman who prides himself on running Granada without putting in the long hours of many senior executives, was for once preoccupied with business matters over the weekend as he weighed the options open to him.
His company has offered four new Granada shares plus £23.25 in cash for every 15 Forte shares, an offer which values Forte shares at 327p, some 18p below their closing market level on Friday. A cash alternative of 322p is available.
Granada, which operates two British regional television stations plus a string of motorway service areas and high street television rental stores, has called the offer "generous" and could be tempted to leave it at the current level.
But city analysts say that Forte's strong defence has pushed Granada into a position where it must raise the bid in order to have any chance of winning the day.
Most believe that Granada will have to come up with something around 370 pence or above a share to emerge victorious.
Many also note that Granada's own shareholders are uneasy about the size of the financial commitment and the diversification into hotels.
Analysts have a high regard for Mr Robinson's management skills and say that he is tough enough to walk away from the bid rather than overpay.
Granada's attack has stung Forte into action and the company is now planning to relaunch itself with the focus purely on hotels if it retains its independence.
It will operate four hotel brands
- Exclusive, Meridien, Posthouse and Heritage.