City: Forte mystery
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Your support makes all the difference.WHAT on earth is going on at Forte, the hotels group? Three months ago Rocco Forte, chairman and chief executive, was being criticised in the City for fouling up on the sale of the group's Gardner Merchant contract catering business, prompting a slide in the company's share price and calls for wide-ranging management change. Thus far Rocco has survived the storm, but now the whole thing looks like blowing up again.
Financiers close to Gardner Merchant say Forte has set its heart on selling the business for pounds 350m to a management buyout consortium backed by CIN Ventures, part of the coal industry pension fund. This despite the fact that there is a much higher offer on the table - said to be around pounds 420m - from one of three rival bidders. Given that the whole of Forte is now only capitalised at just over pounds 1bn, the difference is not inconsiderable.
I'm certain that Rocco has good reason for favouring the MBO over rivals, but shareholders who have got to hear about the impending deal are not so sure. It's looking as if Sir Anthony Tennant and Sir Paul Girolami, recruited last week as directors to help defuse City criticism of the company's family-dominated management, might be called on to perform their non-executive tasks rather sooner than they might have anticipated.
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