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Last Updated:  Thursday, 13 March, 2003, 11:54 GMT
Six Continents wins 5.5bn bid battle
Holiday Inn
Six Continents runs the world's largest hotel group
The world's biggest hotel group has successfully fought off a daring 5.5bn ($8.8bn) hostile takeover bid by corporate raider Hugh Osmond.

Mr Osmond has formally withdrawn his bid for Six Continents after the company's shareholders voted overwhelmingly to reject it at an extraordinary general meeting in London.

If the bid had succeeded it would have been the biggest reverse takeover ever seen in the UK.

But shareholders instead voted to back the Six Continents board who want to separate the company's pub business from its hotel division.

The demerger is expected to trigger a bidding war for the new companies, which will be known as Six Continents Hotels and Mitchells and Butler.

The two companies are expected to be listed on the London Stock Exchange on 15 April.

Result expected

Six Continents shares closed down 16p at 575p.

Investors accepted the demerger plan on a show of hands.

Crowne Plaza
Holiday Inn
Ember Inns
All Bar One
Goose pubs
Hollywood Bowl
Vintage Inns
Innkeepers Lodge
Toby Carvery
Arena Pubs

Millions of proxy votes are still being counted but the company says about 90% of those so far cast are in favour of the demerger.

Mr Osmond's Aim-listed Capital Management & Investment vehicle estimated its costs in connection with the offer will be around 8.5m.

Mr Osmond said: "While we wait for the formal announcement, it seems clear that Six Continents' shareholders have expressed their wishes and we respect them.

"Our offer has revealed the real value of Six Continents that lies to be unlocked.

"It is now the business of Six Continents' management to release this for its shareholders."

He said CMI would "continue to explore opportunities for the benefit of its shareholders."

Mr Osmond could make a fresh approach for Six Continents' pubs business, to be renamed Mitchells & Butlers, after the demerger takes place.

He has also been linked to bid speculation for rival leisure group Whitbread.

Osmond plea

Earlier, Mr Osmond failed in his bid to have Six Continents' egm delayed so investors could have more time to consider his offer.

Hugh Osmond
Mr Osmond has thrown the towel in
Shareholders voted three-to-one to press ahead with the meeting.

Mr Osmond's case was that Six Continents management had squandered shareholder value and presided over a collapse in its share price.

"Leopards do not change their spots... and this demerger will not change the management," he told the meeting.

But Six Continents bosses appealed directly to shareholders to approve their plans.

"We do strongly believe the demerger closes no options," said Chairman Sir Ian Prosser.

Merger talks

Speaking after the meeting, chief executive Tim Clarke, who said both of thecompanies would consider seriously any bid made for them.

"We are obviously very pleased with the results," he added.

Finance director Richard North, who is chief executive designate for the separated hotels group, revealed the group had held a number of merger talks last year.

One of the deals came close to being signed, but all the talks fell down on valuing the hotels with pubs attached, he added.

Further bids?

Earlier this week, venture capital group CVC admitted it was considering a rival offer.

CVC said it had held talks with hotel firms and private equity groups about forming a consortium to bid for Six Continents.

At least two other potential bidders are thought to be waiting in the wings.

Sources quoted by the Reuters news agency said private equity firms Kohlberg Kravis Roberts and Blackstone Group, owner of London's upmarket Savoy hotel, were considering a joint offer.

Six Continents 'faces second bid'
07 Mar 03 |  Business

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