Lord Forte stands aside in bid battle

JOHN SHEPHERD

and MATHEW HORSMAN

Lord Forte is to take a back seat in the Forte company's defence against Granada' hostile pounds 3.3bn bid, which threatens to push one of the UK's biggest family business dynasties into the shadows.

The 87-year-old Lord Forte of Ripley, who built up the family ice-cream parlour business into the largest hotel company in the country, will stand aside, leaving Sir Rocco, his son, to take the lead in meetings of the full board and with the company's advisers.

Lord Forte, who celebrated his birthday yesterday, stepped down from day-to-day involvement in the company's affairs a couple of years ago but remains life president and still attends board meetings.

A spokesman for Forte confirmed yesterday that "Lord Forte will not be directly involved. He wants to leave Rocco to run the show."

The leading family members have clearly shown that they will not see the business dynasty crumble without a tough fight. Sir Rocco has fired off a salvo of personal attacks against Gerry Robinson, chief executive of Granada, since the bid was launched last Wednesday.

There were signs over the weekend, however, that the two sides were aiming to calm things down. Mr Robinson said yesterday: "We want this bid to be depersonalised. We are bidding for a public company."

A spokesman for the Forte camp backed Mr Robinson's call to end the personal mud-slinging, adding. "Of course, there has been a degree of anger."

Lord Forte believes the company can remain independent and added: "We don't need [a white knight]. We already have a knight, my son Rocco."

Mr Robinson said: "The issue is very straightforward. Forte has failed its shareholders on every measure over the past five years. Suddenly they are talking about brands, new management and board changes ... but it's too late."

Leisure analysts believe that Forte will have to devise a radical defence plan to beat Granada, even though the City believes that the television company has not yet put a high enough offer on the table.

Forte's five-year financial record displays several recessionary scars. Profits have been up and down like a yo-yo, and shareholders suffered a dividend cut three years ago and no increase since.

In contrast, Granada has grown profits in each of the past four years following the dive into the red in 1990/91, when the group suffered losses of pounds 110m. The dividend has consistently improved, and last week the total for the 1994/95 year was lifted 17.5 per cent to 11.75p.

Shareholders will not be alone in sharing in Granada's trading improvements. Advisers will collect pounds 70m in bid fees.

Five year trading performance

Forte

Year 1994/95 1993/94 1992/93 1991/92 1990/91

pounds m pounds m pounds m pounds m pounds m

Turnover 1,789 2,106 2,721 2,662 2,641

Pre-tax profits 127 111 153 49 176

Net borrowings 1,577 1,664 1,722 1,704 1,436

Shareholders' funds 2,462 2,352 2,718 3,020 3,052

Earnings per share 10.1p 9.0p 12.7p 3.0p 17.2p

Dividends per share 7.5p 7.5p 7.5p 9.91p 9.91p

Granada

Year 1994/95 1993/94 1992/93 1991/92 1990/91

pounds m pounds m pounds m pounds m pounds m

Turnover 2,381 2,098 1,615 1,340 1,364

Pre-tax profits 351 265 176 115 (110 loss)

Net borrowings 342 293 402 219 262

Shareholders' funds 584 502 464 562 528

Earnings per share 39.1p 32.0p 24.8p 15.9p (28.8p)

Dividends per share 11.75p 10.0p 8.75p 7.7p 7.0p