Granada Sweetens Bid For Forte British Firm Presses Ahead With Hostile Takeover Attempt

Granada Group PLC on Tuesday raised its hostile offer to nearly $6 billion for the hotel and restaurant company Forte PLC. Forte dismissed the price as too low.

But Granada scored one important victory as a key stockholder, the Council of Forte, agreed to sell out if ordinary shareholders approve the deal by the deadline of Jan. 23.

The council is a trust that owns only about 1 percent of Forte, but it controls 50 percent of the voting rights.

Granada, a broadcasting, travel and entertainment business, previously bid about 3.3 billion pounds, or $5.1 billion for Forte - which Granada says is being poorly run by current management. On Tuesday, the offer was raised to 3.8 billion pounds, or $5.9 billion.

Forte’s chairman, Sir Rocco Forte, attacked Granada’s new offer as “a 1980s-style highly leveraged asset strip which has nothing to do with management skills.”

Whichever side wins, Forte will emerge with fewer businesses.

Granada’s chief executive, Gerry Robinson, says that if his company buys Forte, it will sell off the top-end hotels, which operate under the Meridien and Exclusive brand names.

Granada said Tuesday it had placed a “cautious” value of 1.7 billion pounds, or about $2.6 billion, on those hotels. Robinson told reporters Granada had gotten “some interest from serious French players.”

As Forte sought to defeat the bid last month, it reached an agreement to sell its budget hotels and restaurants to the British brewer Whitbread PLC for 1.05 billion pounds, or about $1.63 billion. That deal will go through only if Granada fails to buy Forte.

Forte last week tried to woo shareholders with promises of a big stock buyback and higher dividends.