Osmond fires first shot in Six Continents fight
HUGH Osmond, the pubs entrepreneur, yesterday confirmed he was considering a multi-billion-pound bid for Six Continents in a move that could spark a takeover battle for the demerging pubs and hotels group.
In an audacious move, Mr Osmond is structuring the cash and shares bid via an Aim-listed cash shell, Capital Management and Investment, which holds pounds 14m of Six Continents shares.
Mr Osmond, who has a 6.56pc stake in the company, yesterday became its executive chairman, while his business associate Alan McIntosh became finance director.
Capital Management said it was “considering making a takeover offer for Six Continents” but added: “No assurance can be given that any offer will be made”. It said “a further announcement will be made in the near future”. Six Continents shares rose 35 1/2 to 590p, valuing its equity at pounds 5.1 billion. It also has pounds 2.5 billion of debts. Capital Management shares rose 1 3/4 to 19p, valuing it at just pounds 44m.
Mr Osmond, who has lined up billions of pounds of debt from CSFB and other banks, was last night working on the bid’s structure, which is being discussed with the Takeover Panel.
He may try to persuade Six Continents’ existing lenders, led by Barclays, HSBC, JP Morgan, Royal Bank of Scotland and Salomon Brothers, to help finance his bid, secured against Six Continents’ pounds 7.5 billion assets.
Mr Osmond plans to break up the group, possibly retaining the Mitchells & Butlers pub business. He has held talks with Hilton Group about selling on some of Six Continents’ hotel assets.
Six Continents said it had not received any approach from Capital Management, adding: “The board will review and consider on its merits any proposal that offers a combination of compelling value and certainty of delivery.”
Richard North, the chief executive of the hotels business, said: “I always anticipated he (Mr Osmond) would do something.”
He insisted the demerger, due to be voted on by shareholders on March 12, was the “best route to generate value”, adding: “I sincerely believe I can do something special with this hotel division.”
David Liston, fund manager at 1pc shareholder Gerrard, said: “I do have some doubts over Hugh Osmond’s ability to fund a bid”, adding that he failed to deliver a mooted offer for Pizza Express.(PS)City: (ES)