Granada Makes Bid for Hotel Rival : Mergers: Forte greets the surprise move by urging its shareholders to reject the $5.3-billion offer from the entertainment and leisure company.
Granada Group, a big entertainment and leisure company, launched a surprise $5.3-billion hostile bid Wednesday for hotel rival Forte, which immediately urged shareholders to reject the offer.
The move by Granada, which like Forte runs budget hotels and highway service stations, surprised investors, who had expected it to expand in the media sector. Granada also owns television stations and is a major producer of programs.
Forte, which has developed into an international company from humble origins in the 1930s as a London dairy bar, said the bid “totally fails to recognize the value of Forte.”
Granada Chief Executive Gerry Robinson told a news conference he thinks the bid is a fair one.
“The offer on the table is extremely good for Forte shareholders and for Granada shareholders because of the improvements we could bring,” he said.
Robinson also said Granada had tried but failed to speak to Forte Chairman Rocco Forte.
“We’ve tracked Forte for 2 1/2 to three years. It’s close to our business, particularly in mid-market hotels and roadside catering,” Robinson said. “Put together with our businesses, we feel that its performance could be turned around.”
However, analysts were not so convinced, having expected Granada to make a move in the media sector.
The company has commercial television franchises in northwest England and London Weekend Television and is the biggest supplier of programs to Britain’s independent television network.
“Previously they bought into businesses they clearly knew a lot about, like catering and television companies,” said analyst Jason Crisp of Societe Generale Strauss Turnbull.