BRITISH hotels group Forte Plc yesterday launched an aggressive defence package, including a £800 million sterling share buy back and the demerger of its Savoy Hotel interest, to fight off raider Granada Plc.
Under London Stock Exchange rules, yesterday was Forte's last chance to mount a defence against a £3.3 billion hostile takeover bid launched by Granada on November 22nd.
The buy back, restructuring and demerger plans were key parts of a document entitled simply "Forte's Defence". In this, the chairman, Sir Rocco Forte, said "Forte's proposals offer significantly more value than Granada. (Granada's) offer fails to reflect the outstanding prospects for Forte."
Earlier, Granada said that if it won control, it would seek to restructure Forte's assets. Forte already plans to defend itself with a £1.05 billion sale of Travelodge budget hotels and roadside restaurants to British brewer and leisure operator, Whitbread.
Forte's shares extended early gains and stood at 342p, up 11.5p. Granada shares were down 8p at 637p.
Forte plans to raise its final dividend for 1995 by 21 per cent, making a total 8.5p per share. At the centre of Forte's defence is a new corporate structure, without the interests it has already agreed to sell and its 68 per cent equity stake in the Savoy Hotel company.
Forte's proposed buy back of about 20 per cent of its share capital is intended to enhance earnings per share. It said the move would be 330p-400p per share.
Granada has offered four new Granada shares for every 15 Forte shares, plus £23.25 in cash. It is also offering a full cash alternative worth 321.67p per share. Granada will probably have to raise its bid, perhaps by as much as 15 per cent.
