The Six Continents affair is inevitably reminding observers of what has just happened with the supermarket chain Safeway: a smaller rival, Morrisons, popped up to say it wanted to make a take-over, only to be flattened by a rushing crowd of other would-be bidders.
Certainly if you read the newspapers, since it became public that Hugh Osmond and his team at Capital Management and Investment were stalking SixC there are now at least nine groups who are, or could be, contemplating bids for the group, singly or in concert with another player or two.
Osmond and his team must have known that as soon as news of their interest in a possible bid for SixC became public, the greyhounds would be out of the traps. Secrecy was not an option: it was certainly unlikely that CMI's purchase of £14m in SixC shares would pass unnoticed.
However, CMI had a very narrow window of opportunity: it needed to act after SixC published the terms for its demerger into two separate companies, one running hotels and the other pubs and restaurants, and before the shareholders' meeting just a fortnight from now to approve that demerger. Not least, it would like to save at least some of the estimated £109m costs of the demerger: that may seem a small sum in comparison to £7.6bn of assets, but you could buy a medium-sized managed pub company for that sort of money, especially today.
Osmond has won some of his most famous victories - over Guy Hands, when buying more than 1,400 pubs from Bass in 1997 to found Punch Taverns, and two years later over Whitbread in buying Allied Domecq's 3,500-outlet pub estate - by coming in late. This time he is the first away, and will need to maintain the pace.
A hint that the operation has been slightly rushed came with the revelation over the existence of an "exploding warrants" options package at CMI, which would have given Osmond and some of his associates hundreds of millions of pounds if the company issued more stock to help it acquire SixC. Various anonymous CMI figures quickly insisted the warrants had been left in by accident, and would never now be executed. One adviser said the warrants' continuing existence was "a balls-up". An anonymous CMI figure, clearly agreeing, was quoted as saying that to try to get that sort of reward past institutions in any SixC deal, "you would have to be brain-dead."
Nobody, as yet, has put any firm offer on the table, though the Sunday Telegraph believes CMI could poke its terms through SixC's North Audley Street letterbox as early as today (Monday). Any bid will bring immediate counter-proposals from SixC designed to assure shareholders that only the existing management has the ability to give them the best possible value. Their arguments will need to be convincing: commentators have been welcoming Osmond's approach to SixC on the grounds that, at least as far as the hotels side is concerned, the group has been performing poorly.
In the end, SixC should welcome Hugh Osmond's approach, though it is unlikely Richard North and Tim Clarke, chief executive-designates of the proposed demerged hotels and pubs wings, would accept this argument. Osmond's intervention means the demerger plans look likely now to be subjected to a rigorous examination, with shareholders given a genuine choice. Just the same choice was presented to shareholders of Allied Domecq when it was lined up for what Osmond and others thought was a too-cosy deal with Whitbread to sell its pub estate. That time shareholders and institutions went for Osmond's arguments, and he emerged as the victor. If SixC's management feels its proposals for the demerger really are in the best interests of everybody, it should not be afraid to have them put to the most genuine vote they can offer shareholders - one involving a real alternative offer.
Certainly if you read the newspapers, since it became public that Hugh Osmond and his team at Capital Management and Investment were stalking SixC there are now at least nine groups who are, or could be, contemplating bids for the group, singly or in concert with another player or two.
Osmond and his team must have known that as soon as news of their interest in a possible bid for SixC became public, the greyhounds would be out of the traps. Secrecy was not an option: it was certainly unlikely that CMI's purchase of £14m in SixC shares would pass unnoticed.
However, CMI had a very narrow window of opportunity: it needed to act after SixC published the terms for its demerger into two separate companies, one running hotels and the other pubs and restaurants, and before the shareholders' meeting just a fortnight from now to approve that demerger. Not least, it would like to save at least some of the estimated £109m costs of the demerger: that may seem a small sum in comparison to £7.6bn of assets, but you could buy a medium-sized managed pub company for that sort of money, especially today.
Osmond has won some of his most famous victories - over Guy Hands, when buying more than 1,400 pubs from Bass in 1997 to found Punch Taverns, and two years later over Whitbread in buying Allied Domecq's 3,500-outlet pub estate - by coming in late. This time he is the first away, and will need to maintain the pace.
A hint that the operation has been slightly rushed came with the revelation over the existence of an "exploding warrants" options package at CMI, which would have given Osmond and some of his associates hundreds of millions of pounds if the company issued more stock to help it acquire SixC. Various anonymous CMI figures quickly insisted the warrants had been left in by accident, and would never now be executed. One adviser said the warrants' continuing existence was "a balls-up". An anonymous CMI figure, clearly agreeing, was quoted as saying that to try to get that sort of reward past institutions in any SixC deal, "you would have to be brain-dead."
Nobody, as yet, has put any firm offer on the table, though the Sunday Telegraph believes CMI could poke its terms through SixC's North Audley Street letterbox as early as today (Monday). Any bid will bring immediate counter-proposals from SixC designed to assure shareholders that only the existing management has the ability to give them the best possible value. Their arguments will need to be convincing: commentators have been welcoming Osmond's approach to SixC on the grounds that, at least as far as the hotels side is concerned, the group has been performing poorly.
In the end, SixC should welcome Hugh Osmond's approach, though it is unlikely Richard North and Tim Clarke, chief executive-designates of the proposed demerged hotels and pubs wings, would accept this argument. Osmond's intervention means the demerger plans look likely now to be subjected to a rigorous examination, with shareholders given a genuine choice. Just the same choice was presented to shareholders of Allied Domecq when it was lined up for what Osmond and others thought was a too-cosy deal with Whitbread to sell its pub estate. That time shareholders and institutions went for Osmond's arguments, and he emerged as the victor. If SixC's management feels its proposals for the demerger really are in the best interests of everybody, it should not be afraid to have them put to the most genuine vote they can offer shareholders - one involving a real alternative offer.
