Gresham Hotel Group's net asset value per share stood at €1.63 at the end of December, nearly 21 per cent above the approach being considered by the company.

Gresham released 2003 results yesterday showing it had net assets of €136 million at the end of last year, the equivalent of €1.63 per share. This is well above the revised approach of €1.35 made by a group of investors interested in buying the hotel group.

Gresham declined to comment further on the takeover talks yesterday except to say discussions were ongoing.

Meanwhile, its 2003 results showed that pre-tax profits, excluding exceptional items, rose by 40 per cent to €1.7 million, compared with €1.2 million in the 11 months to December 2002. This was despite a 5.5 per cent drop in turnover to €47.9 million.

Chairman Mr Harvey Soning said the results reflected "a satisfactory performance given the upheaval within our industry caused by the conflict in Iraq and the SARS epidemic".

During the year, the company sold its hotels in Killarney, Limerick and Galway to allow it to concentrate on its city-centre locations. It raised €35.75 million from the disposals and used the cash profit of €14 million to pay down debt to €37 million at year-end. Gresham's debt/ equity ratio at year-end was 27 per cent, down from 55 per cent at the end of 2002.

Gresham did not comment on the outlook for the current year, nor did it propose a dividend payment, because it is in an offer period.

The company, which has hotels in Dublin, Cork, London, Brussels, Amsterdam and Hamburg, was first approached by the consortium of investors last November.

An initial approach of €1.35 was rebuffed by Gresham's largest shareholder, Israeli group Red Sea, which owns 28 per cent of the shares. But a later approach at €1.45 was revised down to €1.35 earlier this week after the consortium conducted due diligence on the company.