Granada Buys Nearly 10 Percent Of Forte Stock
Jan. 16, 1996
LONDON (AP) _ Granada Group PLC went into the stock market Tuesday and snapped up more than 9 percent of takeover target Forte PLC, setting off another war of words in the merger fight.
Forte chief executive Sir Rocco Forte accused Granada of buying 9.9 percent of the company by paying some stockholders more than the cash price it was offering all shareholders.
``Granada had yet again shown its true colors by favoring certain shareholders over others,'' said Sir Rocco Forte, who a day earlier had relinquished the title of chairman under pressure from investors who want a new management structure.
Granada countered that it had purchased only 9.2 percent of Forte, but it dismissed Forte's suggestions that some shareholders received favored treatment.
``It was a highly successful raid on the market, but it was done in the open market, with no favoritism at all,'' Granada said. ``Anyone who wanted to could have sold us their shares.''
Granada stopped at 9.2 percent to give it flexibility in handing the bid, which values Forte at 3.8 billion pounds ($5.88 billion) if Forte shareholders accept by next the deadline of next Tuesday.
Analysts said the stock buy shows Granada's confidence in the bid, because the leisure and broadcasting group would not want to end up owning a minority stake in Forte, a restaurant and hotels group.
Granada is seeking to buy Forte for a combination of cash and stock that valued each Forte share at 383.9 pence ($5.95) late Tuesday _ the price Granada paid in the market.
But Sir Rocco Forte pointed out that Granada had paid more than the 362 pence ($5.61) that it is offering to Forte shareholders who want to sell out for cash only.
After Sir Rocco Forte split his duties Monday, to become only the chief executive, the company named its deputy chairman, Sir Anthony Tennant, as its next non-executive chairman.
Whichever side wins the battle that has been hotly contested since November, Forte will emerge as a smaller company after millions in assets are sold. Shareholders will end up with cash in their pockets.
Granada sought to sweeten its bid early this year by adding a special dividend of 47 pence (73 cents), while Forte has promised to raise dividends for the next three years.
Forte has said it wants to sell its budget hotels and restaurants to the British brewer Whitbread PLC, while spinning off its stake in the Savoy luxury hotel company and giving it to shareholders. That would leave Forte to focus on its Forte Posthouse and Forte Meridien hotel groups.
Granada has blasted Forte's planned divestitures as the work of managers who don't know what they are doing, but Granada chief executive Gerry Robinson said he wants to sell off the Meridien hotels.