The final curtain fell on Forte this week, as Granada succeeded in its £3.87b takeover bid. In one swoop, the Forte family’s domination of the UK hotel industry was ended.
At Forte’s London headquarters tears were shed as the management team and the support staff reconciled themselves to defeat despite the greatly admired defence campaign they had mounted.
By 3pm on Tuesday, Granada announced it had received acceptances for 61% of the share capital of Forte. The final counting continued as Caterer went to press.
Gerry Robinson, Granada’s chief executive, said he was delighted with the outcome. “We said from the outset that we regarded this as a significant opportunity for Granada and that we could realise substantial value from it,” he added.
However, one City analyst spoke for many when he told Caterer the takeover was won on price rather than strategic logic.
Sir Rocco Forte, chief executive of Forte, expressed disappointment at the result. “This was a battle between two opposing philosophies. We have lost the bid. I do not believe that we have lost the argument,” he said.
The main winners from the bid appear to be City professionals. Analysts at Kleinwort Benson Securities estimated the total costs incurred by both sides would total £248m.
The fees and loss of value for disposing of the assets, together with the £50m paid to the Council of Forte, were estimated to add another £350m to Granada’s bill.
Among the losers in the hospitality industry are Whitbread, tipped now to pursue other targets, possibly PizzaExpress or JD Wetherspoon, and Regal Hotel Group. Both had struck deals to buy parts of Forte.
The Regal deal, announced three days before the bid deadline, involved the sale of 67 of the 72 White Hart hotels for £122m. Regal is now hoping to do a deal with Granada.
Regal chief executive Charles Vere Nicoll told Caterer he had already been in contact with the company. “We have every intention of trying to reach agreement with Granada and we hope they will feel likewise.”
Granada is committed to £2.1b of asset disposals, which includes the Méridien and Exclusive Hotels chains, as well as White Hart and the stakes in Alpha Airports and the Savoy Group. The future of Heritage remains unclear, however, and it may yet also be sold.
Potential buyers for the upmarket hotels include Marriott International and ITT Sheraton, and Accor has not ruled itself out of contention.
Sources in the City suggested Granada had already lined up a purchaser for both Exclusive and Méridien as one lot, but other players, including some non-hotel companies, may yet put in bids.