A fresh takeover approach for the Gresham Hotel group lifted the company's shares by 12 per cent yesterday in heavy trading. Emmet Oliver reports.
The hotel group declined to name the company who made the approach but said a statement would be issued in due course. It issued the usual caveat that the approach might not necessarily lead to an offer.
The approach is believed to have come from a party unconnected to the consortium that was involved in talks with Gresham last month.
Gresham is understood to have first learned of the approach yesterday afternoon.
The hotel group attracted a good deal of attention on the stock exchange yesterday, with shares climbing 12 per cent to €1.15. Trading was heavy in anticipation of some announcement by the company.
AIB Corporate Finance is acting for Gresham in relation to the potential sale.
Another consortium recently said it was walking away from a bid. The consortium, believed to comprise of three Irish investors with experience in the leisure and hotel sector, said it was abandoning its bid.
The consortium was believed to have offered to pay between €1.25 and €1.30 per share for the group, valuing it at between €99 million and €103 million. The consortium was reported to have secured financial backing from a British equity house.
The road to a possible takeover dates back to last year when its new board of directors began a strategic review of the group, covering all aspects of the company, including its publicly quoted status.
Red Sea, which is the biggest single shareholder in the Gresham Hotel group, holds its 28 per cent stake in Gresham through Euro Sea and Hapoalim Nominees. Mr Harvey Smith, a business adviser to Red Sea, took over as Gresham chairman in 2002. Mr Amos Pickel, a director of Red Sea, also joined the Gresham board.
The Gresham group has hotels in Ireland, the UK and Europe. Since Red Sea took its stake, the group has sold hotels in Galway, Limerick and Killarney.
The Gresham group posted a pre-tax loss of €394,000 for the six months to June 30th, 2003, when trade in the sector was hit by the war in Iraq and concerns over the SARS virus, particularly among US customers.
