The group of investors seeking to win control of Gresham has again revised the amount it is prepared to pay for the company to €1.30 per share on condition that it wins the support of 54 per cent of the hotel group's shareholders. Jane O'Sullivan, Markets Correspondent, reports.
Such an offer would value the hotel group at €103 million.
The Deloitte & Touche-led consortium has also included a provision in its approach that the offer will increase to €1.35 if the level of acceptances reaches 80 per cent.
But this is only possible if the company's majority shareholder, Red Sea, which has already rebuffed an approach at this level, changes its mind and decides to accept such an offer.
Gresham said yesterday that its board and the consortium had continued discussions and were now "moving forward with a view to the consortium announcing a firm intention to make an offer during the week commencing May 10th."
Analysts said the latest approach from the consortium, which is headed by Jackson Homes owner and property developer Mr Brian Cullen, was designed to up the ante with Red Sea.
"They are very much putting the ball back in Red Sea's court," said Mr Peter Frawley, analyst with Merrion Stockbrokers.
The Israeli group, which controls around 28 per cent of Gresham shares, has already refused to accept a revised €1.35 per share offer, which would value the company at €107 million. Its refusal to accept such an offer has made it impossible for the consortium to gain complete control of the hotel group.
Instead, the consortium now appears willing to go ahead with an attempt to win acceptances from holders of 54 per cent of the ordinary shares - which would represent over 50 per cent of the voting rights of the company. This would allow it to reconstitute the board and de-list the company.
Aside from the Red Sea stake, Gresham shares are widely held by a large number of retail investors.
However, it is understood that around 40 per cent of the shares are held in nominee or institutional accounts, which should make it relatively easy for the consortium to win 54 per cent acceptances.
Analysts said Red Sea would now have to decide whether to accept the €1.35 per share offer or launch a counter-offer, thought to be unlikely.
The third option is to become a minority shareholder in a private company. But this could cause problems for Red Sea, whose stake in Gresham is held as security by Israel's Bank Hapoalim as part of a refinancing arrangement. The bank is unlikely to be pleased if it finds itself holding security over a non-tradeable asset.
Shares in Gresham closed just below the level of the revised approach at €1.25, having gained five cents yesterday.
The other members of the consortium, who have been circling Gresham since last November, are Dublin solicitor Mr David Coleman and builder Mr JJ Murphy. An earlier approach at €1.45 was revised downward after the consortium carried out a due diligence on the hotel group and found the value of its properties did not meet its expectations.
