Gresham shareholder accepts €117m offer

THE Gresham Hotels takeover saga finally reached its endgame yesterday as the company's major shareholder moved to accept an improved offer that valued the group at €117 million.

Precinct Investments, the vehicle set up by businessmen Bryan Cullen, JJ Murphy and David Coleman, said it had increased its earlier offer of €1.30 per share and would pay an extra 10c for outright control of Gresham.

Major shareholder Red Sea Hotels, the Israeli hotel group that controls 28% of Gresham and had opposed earlier takeover attempts, will accept the new offer.

Red Sea chief executive Amos Pickel, who also sits on the Gresham board, said the company's decision to hold out had been vindicated.

"We are now willing to accept a higher offer of €1.40 per share from Precinct, which we believe delivers higher value to all Gresham shareholders.

"Our stance has been completely vindicated by the fact that after months of avoiding the issue of value, a good deal has finally been secured for all shareholders," said Mr Pickel. The Gresham board will recommend the terms to all shareholders.

Precinct chairman JJ Murphy said the new offer gave shareholders "an attractive cash exit."

The deal values Gresham at 59% more than the company's average market capitalisation in the six months prior to November 2003, when Gresham first announced it had received a takeover approach.

Precinct's previous offer had been accepted by 37% of shareholders, who need to take no further action and will be deemed to have automatically accepted the revised bid.

Precinct had extended the deadline for accepting the original proposals earlier this week in an effort to get more shareholders on board, before tabling yesterday's higher price.

Following yesterday's developments, the Irish Takeover Panel suspended an investigation to establish whether Red Sea had been acting in concert with Balram Chainrai, a businessman who holds an 11% stake in Gresham through investment company Whiterain.

Red Sea and Mr Chainrai would have been forced to make a bid for Gresham if the panel had established a link between them, as their combined shareholdings exceeded 29.9% of the company.