Granada resumes the attack

Forte fight: Robinson answers critics' doubts about his plans for asset sales

JOHN SHEPHERD

and MATHEW HORSMAN

Granada yesterday moved strongly back on the offensive, countering City sceptics who said it would not be able to achieve its stated aim of raising pounds 500m from the sale of Forte's assets should its pounds 3.3bn takeover bid for the hotels group succeed.

Gerry Robinson, chief executive of Granada, who today begins a whistle- stop tour in Scotland of his company's institutional shareholders, said Granada had only made conservative assumptions about the sale prices that could be achieved for Forte's chain of Welcome Break motorway service stations, its 68 per cent shareholding in the Savoy hotels group and the 25 per cent stake in the Alpha Airports catering business.

He also gave a detailed insight into how meticulous Granada's planning was before it launched its bid a week ago - particularly its plans for Forte's market-leading roadside restaurant chains, Happy Eater and Little Chef.

"We have a site-by-site plan for 80 per cent of the Happy Eaters and Little Chefs. We know where there are planning applications for alternative restaurants near and around these sites. We are up to speed on this. The service at the sites is bad in our view. The original concept still looks good, but has not been kept up to date. We would introduce fast food into these sites. We want commercial relationships, such as Burger King, that give us a good return."

Mr Robinson believes Granada can sell the Savoy stake despite Forte's well chronicled scraps with the upmarket hotel group over the years, which have virtually wiped out the marketability of the shares.

"You have got the trophy asset players. And there probably is an institutional play there, a view supported by the share price rise of the Savoy since we made our bid. It does look as if there is interest in this," Mr Robinson said.

Sir Rocco Forte, chairman and chief executive of Forte, disagreed. "The Savoy is not an easy situation. We have had lots of approaches to sell the shares over the years, but below the market value," he said.

"Since there's no market in the shares, any comment about the Savoy means they [the shares] are marked up. That does not mean there is any growth in demand for the shares."

Meanwhile, the directors of the Savoy have formed an executive committee to monitor the situation. Forte's representatives on the board - Sir Rocco and Sir Anthony Tennant - have agreed to be excluded from the committee.

Mr Robinson said Forte was unable to make asset sales because Sir Rocco was difficult to negotiate with. "We couldn't get to talk to them about Gardner Merchant [the catering business]. And they shouldn't have been selling it anyway."

Nonsense, said Sir Rocco. "Granada didn't make an offer that was good enough. He offered pounds 100m less than I got for Gardner Merchant." Mr Robinson further attacked the management style at Forte, singling out the way the budget Travelodges were being run.