Una McCaffrey
The Takeover Panel has told a consortium looking to buy Gresham Hotel Group that it must make an offer by January 16th or walk away from the deal.
In a move apparently designed to force the matter, the panel said yesterday that its ruling followed representations from Gresham and correspondence with advisers to both the consortium and the hotel group.
The panel's decision comes two weeks after Gresham said it had informed the unnamed consortium, which is being advised by Deloitte Corporate Finance, that it must either amend a pre-condition for its intended offer or put a higher price on the table.
Gresham, at that time, confirmed that it had been in discussions with a consortium willing to offer €1.35 per share for the company. The group's dominant shareholder, Red Sea, had rebuffed the approach because it did not want to sell its 28 per cent stake. This meant that the consortium's offer could not proceed, since it was conditional on achieving shareholder acceptance of 80 per cent.
The consortium, which is believed to include three investors with property interests, did not comment on Gresham's December statement and is believed to have made no contact with the company since then.
A removal of the 80 per cent acceptance condition is seen as unlikely, since a break through this threshold would be necessary to allow the consortium compulsorily purchase remaining shares. This would, in turn, allow the consortium's bankers, Anglo Irish Bank, to secure its liability against Gresham's property assets rather than shares.
Gresham chief executive Mr Patrick Coyle yesterday welcomed the panel's intervention, saying it would be good to have some "clarity" in the process.
He pointed out that the consortium's first approach to Gresham had been made public almost two months ago, with smaller shareholders effectively left in limbo since then.
Another consortium failed to win control of the hotel group a few months before the current group became involved.
Shares in Gresham fell one cent to €1.17 yesterday.
