$113m takeover bid for Gresham

THREE Irish businessmen yesterday launched a €113m takeover bid for the Gresham Hotel group. The long-threatened takeover bid for the Gresham Hotel Group finally came yesterday afternoon.

Precinct Investments, established and controlled by David Coleman, Bryan Cullen and John Joseph Murphy for the purpose of making the offer, tabled the bid with the agreement of the majority of the Gresham board.

A pre-conditional cash offer, to be made by Deloitte Corporate Finance on behalf of Precinct, to acquire the entire issued and to be issued share capital of Gresham was formally made yesterday. Precinct Investments plans to take the company private and de-list it from the Irish Stock Exchange.

Shareholders are to be offered a cash consideration of €1.30 per share and an additional contingent cash consideration of €0.05 per share.

The shares closed at €1.28 last night.

The offer documents state: "Subject to the offers being declared unconditional, the additional contingent cash consideration of €0.05 per Gresham Share shall become payable to all Gresham shareholders who validly accept the offers in the event that valid acceptances have been received in respect of at least 80% of each of the ordinary shares and preference shares to which the offers relate."

Gresham's largest shareholder Israeli company Red Sea, who hold 27.7 % of the company immediately rejected the offer.

Red Sea directors on the Gresham board, Amos Pickel and Harvey Soning, are opposed to the deal.

A spokesman for Red Sea said: "The Precinct consortium has dithered its way along and today (yesterday) delivered a flunk of an offer for Gresham Hotel Group. Red Sea Hotels will be flatly rejecting this offer and would urge all shareholders to do the same."

Precinct said the cash consideration of €1.30 per ordinary share and the contingent full cash consideration of €1.35 per ordinary share payable under the ordinary share offer will represent multiples of approximately 48 and 50, respectively, of the basic earnings per ordinary share of 2.7c for the Gresham Group for the year ended December 31 2003.

Gresham MD Patrick Coyle said the offer to accept a 54% or greater holding in the company was unique and provided smaller Gresham shareholders with an exit from the company at a share highest price of €1.30, with the prospect of a five cent bonus if Red Sea had a change of mind and accepted the offer.

Yesterday, the Irish Takeover Panel published a disclosure by the Israel Discount Bank Ltd on behalf of Whiterain Internationale Ltd that it held a 3.8% holding in the company.

Precinct chairman John Joseph Murphy said: "We are delighted that we have reached agreement with the board of Gresham in connection with the offers and we look forward to working with the management and staff of the group in developing and expanding the Gresham business."

Gresham senior non-executive Donal Chambers said: "These offers represent an excellent opportunity for shareholders to realise their investment for cash and accordingly, the majority of the directors recommend them to shareholders."

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