Capital Management and Investment, Hugh Osmond’s bid vehicle, has outlined its plans for Six Continents following its anticipated bid.
CMI and its advisers, Credit Suisse First Boston and Lehman Brothers, said that they did not believe Six Continents’ demerger proposals were in the best interests of the shareholders.
Osmond said: "We've studied Six Continents' proposals and, in our view, they fall a long way short. Six Continents is spending over £100m to split itself into two.
"It wants shareholders to continue backing the same management that has already destroyed shareholder value. In return, this management intends doing nothing it couldn't have done long ago.
"At the same time, Six Continents intends handing back substantially less money to shareholders than it indicated it would only last September 11.
"Shareholders deserve better and they deserve it now. That's what we're working on."
CMI said that it had conducted extensive public due diligence in preparation for a potential offer and has held substantive discussions with banks and potential strategic partners in developing its plans.
CMI said that the offer it was considering making was based on breaking up the hotel business, which it said would be ‘extremely attractive to major international hotel operators, whether as buyers, partners or managers’.
The offer is also based on unlocking cash from Six Continents' fixed asset base of £7.6bn by a programme of asset sales, sale and leasebacks, securitisations and other secured real estate financing techniques.
CMI intends to maximise the value of the pub operating business and dispose of other non-core assets.
CMI outlined incidents in the past where it believed Six C ‘has delivered unacceptably low returns’. These included its purchase of InterContinental, which it said had ‘destroyed shareholder value in every year since acquisition’.
CMI also pointed to the company’s having invested £2.8bn since 1998, but seen operating profit reduce by £217m.
CMI and its advisers, Credit Suisse First Boston and Lehman Brothers, said that they did not believe Six Continents’ demerger proposals were in the best interests of the shareholders.
Osmond said: "We've studied Six Continents' proposals and, in our view, they fall a long way short. Six Continents is spending over £100m to split itself into two.
"It wants shareholders to continue backing the same management that has already destroyed shareholder value. In return, this management intends doing nothing it couldn't have done long ago.
"At the same time, Six Continents intends handing back substantially less money to shareholders than it indicated it would only last September 11.
"Shareholders deserve better and they deserve it now. That's what we're working on."
CMI said that it had conducted extensive public due diligence in preparation for a potential offer and has held substantive discussions with banks and potential strategic partners in developing its plans.
CMI said that the offer it was considering making was based on breaking up the hotel business, which it said would be ‘extremely attractive to major international hotel operators, whether as buyers, partners or managers’.
The offer is also based on unlocking cash from Six Continents' fixed asset base of £7.6bn by a programme of asset sales, sale and leasebacks, securitisations and other secured real estate financing techniques.
CMI intends to maximise the value of the pub operating business and dispose of other non-core assets.
CMI outlined incidents in the past where it believed Six C ‘has delivered unacceptably low returns’. These included its purchase of InterContinental, which it said had ‘destroyed shareholder value in every year since acquisition’.
CMI also pointed to the company’s having invested £2.8bn since 1998, but seen operating profit reduce by £217m.
