Gresham takeover edges closer

THE takeover of Gresham Hotels edged closer yesterday after it emerged that the consortium that made the approach have dropped the precondition that 80% of shareholders accept the offer before a formal approach.

Shares rose sharply on the news yesterday, gaining 16% in late trading to €1.22.

Gresham has allowed the unnamed consortium seeking to buy the company a further two weeks to consider whether to make a full offer.

The consortium approached the Irish Takeover Panel about extending the deadline, which expired yesterday evening, for an extension until January 30. Having secured approval, Gresham also agreed to the extension.

The group said the indicative offer remained the same at €1.35 per share, valuing it at €107 million, but it was willing to enter into discussions with the consortium.

The main obstacle to the sale would seem to be the 28% stake held by Israeli hotel group Red Sea.

Yesterday’s announcement by Gresham that the bidder has remove the 80%-backing precondition will go some way towards getting an offer accepted.

Gresham has been hit by the tourism slump, earning just under €1 million in operating for the half year to end July 2003 on turnover down from €26.8m to €25.3m.

Shares have more than doubled over the past 12 months, though still trading below the net asset value per share.