The battle to take control of the Gresham Hotel Group has ended with Precinct, the consortium comprising Mr Bryan Cullen, Mr JJ Murphy and Mr David Coleman, emerging as the victors.

Its deadlocked takeover proposal moved towards acceptance when Gresham's biggest shareholder, the Red Sea Hotel Group, decided to accept an improved offer of €1.40 per share for the group.

Three other shareholders who had built up a stake in the company, Whiterain International, which owns 11 million shares, the Hong Kong businessman Mr Balram Chainrai, who holds 100,000 shares, and the Monaco-based businessman Mr Ian Ilsey, who holds 3.5 million shares, have also agreed to accept Precinct's offer.

This significant development means that investors holding 99.7 per cent of the Gresham Hotel Group shares have now accepted the Precinct offer.

The deal, which values the hotels group at €117.2 million, will have to be formally approved by shareholders.

In a statement, Red Sea Hotels said it had decided to accept the €1.40 per share offer because it believed it delivers higher value to all Gresham shareholders. "Our stance has been vindicated by the fact that after months of avoiding the issue of value, a good deal has finally been secured for all shareholders," said its chief executive, Mr Amos Pickel.

Yesterday evening Precinct said it was "delighted" with the outcome. A spokesman for Deloitte Corporate Finance, which advised Precinct, said it was "amused" by Red Sea's statement.

"Clearly they have a difficulty dealing with the concept of defeat. The pressure of a Takeover Panel inquiry clearly had an impact on Red Sea and the other shareholders' decision to accept the offer," he said.

The Takeover Panel had summoned the Gresham Hotel Group, Mr Chainrai, the Discount Bank of Israel (through which he bought the shares), Davy Stockbrokers and Davy Corporate Finance to a public hearing as part of its inquiry into controversial share dealing.

It was seeking to establish whether Red Sea Hotels had been acting in concert with Whiterain International, the investment vehicle used by Mr Chainrai, who had recently acquired an 11 per cent stake in the hotel group. Last night it said it had decided to adjourn the preliminary hearing due on July 8th pending the outcome of the Precinct offer.

Precinct first approached the hotel group with an offer of €1.12 per share in November 2003 after another consortium, which was believed to have offered between €1.25 and €1.35 per share, walked away.

Gresham Hotels has hotels in Ireland, the UK and Europe and has been the subject of takeover speculation since Red Sea began to build a stake in the group in 2000.

Since then it has spent up to €23 million buying Gresham shares at an average price of €1 each.

The battle for control of the Gresham Hotel Group began in May 2000 when the Red Sea Hotel Group swooped to buy the 16.6 per cent stake owned by the Guernsey-based Ashdown family for 13 million.

Days later, the Donegal-based hotelier brothers, Mr Brian and Mr Sean McEniff, paid 4 million to acquire a 5.3 per cent stake in Gresham.

Some industry sources speculated that Red Sea's entry had frustrated their plans to gain control of Gresham's hotels and within a few months the McEniffs sold out to Red Sea.

A Monaco-based businessman, Mr Ian Ilsey, later purchased a 4 per cent shareholding in the hotel group. His investment in the company was examined by the Irish Takeover Panel which was unable to establish if he was connected to Red Sea.

In 2002 Red Sea increased its stake to 28 per cent, the maximum level it could purchase without making a mandatory bid for Gresham. It then took control of the hotel group's board of directors and appointed Mr Harvey Soning as chairman.

In October 2003 Gresham confirmed that it had received a takeover approach from a consortium of investors which was offering 1.25 to 1.35 per share.

A month after they abandoned their approach, Precinct emerged.