Accor Withdraws All Interest in the Forte Hotel Division

Accor is reported to have withdrawn its interest in purchasing the Forte hotel division of Granada Compass, having failed to negotiate a satisfactory price for the portfolio, estimated at around £3 billion.

The Granada Compass portfolio, comprising Le Meridien, Posthouse and Heritage hotel brands as well as four London Signature Hotels, will now be auctioned off individually. According to Andrew Lynch, the group's Finance Director, Granada Compass has received considerable interest for all brands. While the disposal of individual parts is a slower process, he believes it should ultimately deliver greater value with an estimated £4 billion cited by some analysts.

The market reacted positively to the news of Accor pulling out of the equation, following much unwanted press concerning the means of financing such a deal. Since the start of the rumours, Accor's share price has lost over 10% of its value.

Accor, which was once regarded as the favourite to acquire the whole Forte empire, has declared that it will not bid for the much sought after Le Meridien chain. Some analysts consider this unlikely and rather than abandon all interest, Accor may enter into an agreement whereby ownership is left to a third party while Accor manages specific brands in the portfolio.

Speculation is again rife, with a number of international players thought to be interested including Bass, Hilton, Sol Melia, Millennium & Copthorne, Whitbread and certain venture capitalist groups.