Forte expected to announce a special dividend worth £500m
THE battle for control of British hotel group Forte enters a key phase today as the company reveals its final arguments for rejecting the £3.2 billion sterling bid.
According to some market reports, Forte will announce a special dividend of £500 million as a carrot to its shareholders not to accept the hostile takeover bid.
The 50 pence a share special dividend would be financed by the already announced sale of Forte's roadside services and budget hotels to brewing and leisure group Whitbread for just over £1 billion, which can only take place if the Granada bid fails, according to reports.
Meanwhile, Forte has also recently raised its full year profit forecast to a minimum of £190 million sterling because of better than expected hotel bookings in December. Three weeks ago, Forte tabled a forecast of £185 million for profits before "tax and exceptionals in the year to January 31st.
The new profit forecast is 50 per cent up on last year's result of £127 million. Forte said income per share would be 44 per cent higher at 14.5p.
Forte, which has around 900 hotels worldwide, controls four main chains Posthouse, Heritage, Exclusive Hotels and Meridien, which was bought from Air France in November 1994. Three quarters of its turnover and 90 per cent of its profits come from British operations. The sale to Whitbread would allow the group to concentrate on its hotel activities.
The group's chairman, Sir Rocco Forte, has also sought to deflect criticism from Granada's Irish born chief executive Mr Gerry Robinson that it has devoted too much attention to acquiring prestige sites such as George V and the Plaza Athenee in Paris and the Ritz in Madrid. Since the Granada bid, Forte has announced it intends to sell its 68 per cent stake in the Savoy Group.