The consortium bidding for control of the Gresham Hotel Group has had a positive response to its €1.30-a-share offer for the company from its retail shareholders ahead of tomorrow's deadline for accepting the bid.

Mr JJ Murphy, one of the three principals in the Precinct Consortium, which is bidding for control of the hotel group, told The Irish Times yesterday that it was "very encouraged" by the response to the offer.

"Our stockbrokers have told us that acceptances from the ordinary shareholders have been pouring in," Mr Murphy said yesterday. "The institutions always leave it to the last minute but they have reacted positively to the offer."

Irish institutions hold about 15 per cent of the company.

Precinct has offered €1.30 a share for Gresham, rising to €1.35 if the group secures 80 per cent acceptances. The higher offer values the company at €113 million. Gresham shares closed at €1.28 when the offer was announced last month.

Israeli group Red Sea Hotels holds 24 per cent of Gresham, while Hong Kong-based Indian businessman Mr Charai Balaru holds a further 10.3 per cent. He bought this stake through the Discount Bank of Israel. A Red Sea spokesman has already described the Precinct bid as a "flunk offer".

However, yesterday Mr Murphy argued that this was the best opportunity for ordinary shareholders to realise their investment, pointing that the price represented 50 times' Gresham's earnings.

Precinct needs to get acceptances from more than 80 per cent of Irish and institutional shareholders if it is to get control of the company. Mr Murphy said he was hopeful it would get this.