Daniel Thwaites, the Lancashire-based brewer and pub operator, is under pressure from its largest institutional shareholder not to sell the Stafford Hotel in Central London for the depressed price of £75m.
Guinness Peat Group (GPG), the activist shareholder which holds a more than 6% stake in Thwaites, has sent a letter to the board describing the deal as a “fire sale” that will lead to “an immediate and material diminution in shareholder value”, writes The Times.
In the letter, GPG called on the board to provide “immediate confirmation that the company will not undertake a sale of the Stafford at a depressed price of at or around £75m”, as it believed that the hotel could be disposed off for £100m “in the right property environment”.
It said that if Thwaites refused, GPG “will be forced to raise our concerns directly and publicly with shareholders”.
The shareholder points out that it has concluded that Thwaites’ decision to scrap the final dividend means that it is struggling to cope with its debt burden and therefore “the sale of the Stafford was driven entirely by the need to reduce debt”.
In the letter to Ann Yerburgh, the company’s chairman, GPG said that it would be willing to subscribe for new shares worth up to £20m to help Thwaites reduce its net debt of £136m and prevent it from being forced to sell assets in a depressed market.
The activist investor said: “We would not be averse to the new shares being offered publicly or privately to existing shareholders.”
It is understood that Thwaites has entered into exclusive talks with an Egyptian bidder to sell the 105-room Stafford in St James’s for between £75m and £80m.
