Citing a lack of hotel experience and possible corporate governance issues in Osmond's firm, 6C chief executive Tim Clarke, explains in a statement that, "CMI's offer would enrich its directors at the expense of our shareholders' long term interests. The vague proposals set out carry considerable risk, which would be borne by our shareholders."
The bid outlined by the British restaurant and pub entrepreneur included shares in his shell firm, CMI, along with a facility to offer about a quarter of the purchase price in cash if requested.
However, Clarke says 6C's board maintains that, "De-merger is the best method to unlock the value of two market leading businesses and will preserve choice for shareholders."
Had the Osmond deal been approved, the acquisition would have been the biggest in Europe's hotel industry. Market commentators have stated that Osmond's bid rested on investors trusting his management skills over that of 6C's current management. The opportunistic big would have generated £340 million ($537 million) for his private equity group Sun Capital, which owns 20.4% of CMI, and brought Osmond himself an estimated £100 million ($158 million) for his work. Six Continents' debt stood at £1.2 billion ($1.9 billion) and net assets valued at £5.4 billion ($8.5 billion) on 30 September 2002, says Osmond.
However, CMI is not the only company eyeing a takeover of Six Continents--which comprises a pub and restaurant business along with several hotel chains including Holiday Inn and InterContinental. Numerous hotel corporations, such as Hilton Group Plc, Hilton Hotels Corp., Marriott International and Starwood Hotels & Resorts are also rumored to be in the running.
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