Red Sea wins battle to control Gresham

The Red Sea consortium has wrested control of the Gresham hotel group. Yesterday it succeeded in removing four more of the hotel's directors, including joint chairman, Mr Sean Henneberry, and replacing them with three of its nominees.

Euro Sea chief executive, Mr Amos Pickel, Mr Harvey Soning, a property adviser to the group, and former managing director of Davy Corporate Finance, Mr Tom Byrne, will now join the six-member Gresham board, which also includes the hotel group's joint chairman and chief executive, Mr Patrick Coyle.

Red Sea, which includes the Israeli-based Euro Sea hotel group and Monaco-based shareholder Mr Ian Isley, controls 28 per cent of Gresham and has been waging a battle to seize control of the ailing hotel chain in recent months. In June it won shareholder support for the removal of three directors. Now Mr Henneberry, Mr David Bunworth, Mr Patrick Bourke and Ms Laura Magahy have been forced to exit the Gresham board.

Announcing the outcome, Mr Pickel said he was looking forward to taking up his position on the board and working towards creating shareholder value. "The recent period of uncertainty for all shareholders is over and it is now time for the new board to concentrate on the real issues at hand - working together in planning and executing a programme of growth that delivers value to all shareholders."

Mr Coyle said he was pleased to welcome the new directors to the board. "In my capacity as chairman, I will act to ensure that, as a board, we shall act in the interests of the body of shareholders as a whole."

Shareholders overwhelmingly supported the resolutions put forward by Red Sea's representatives at an extraordinary general meeting of the company in Dublin yesterday.

Red Sea secured close to 60 per cent of the votes cast by shareholders in almost all of the motions put to the meeting.

Mr Pickel told the meeting Red Sea was not seeking control of the hotel group but merely wanted to refresh the board of directors to boost its fortunes.

"As a shareholder, like you, we have seen our investment in Gresham spiral downwards over the past two years. We are as eager as you to put Gresham back on track in terms of delivering positive results and improving the company's performance."

Gresham director Mr Donal Chambers, who chaired the meeting, utterly rejected Red Sea's claims. "All of this is happening because 28 per cent wish to control the composition of the board. It is very simple really. If you want control, pay for it - make a bid," he said.

Some 300 shareholders attended the meeting with many expressing their support for both the existing board and the Red Sea consortium.

One shareholder, Mr Tom Griffen, described the information Red Sea had circulated to shareholders to canvass their support as "patronising rubbish".

It made reference to the wider range of hotels from which shareholders, who are eligible for discounts, would be able to choose. Mr Griffen wondered would their choice include the Tel Aviv Hilton. "I would prefer the west bank of the Shannon myself," he told the meeting.

Another, Mr Charles Lysaght, a long-standing shareholder, criticised the board of directors for its "pathetic performance" in managing the company over a long number of years.