Marriott A Mention In 6C Mix As Shareholder Vote Looms

NEW YORK— With the Six Continents PLC extraordinary general meeting that will determine its fate less than a week away, the lodging and pubs giant on Friday was still battling to stay on track with its planned demerger— which will require 75% shareholder approval on March 12— this time possibly against deep-pocketed, global hotel operator Marriott International. Reports in the Financial Times today placed Marriott in discussions for a potential bid for 6C with Texas Pacific Group, a U.S. buyout concern and U.K.-based CVC Capital Partners Ltd., a private equity group. Marriott did not return calls for comment. Six Continents said it had not received any bid proposal from Marriott or its reported bid partners. The company said it did not expect any potential offer to be presented before its planned demerger, although it did stress it would “seriously consider any proposal that might be attractive to shareholders and has reasonable prospect of delivery.” Earlier this week British entrepreneur Hugh Osmond, via Capital Management & Investment (CMI), launched a £5.64 billion (US$8.91 billion) hostile bid for the company that was “firmly” rejected by 6C, which said “CMIs proposal gives shareholders nothing they do not already own except significant risk.” Still, talk swirled Friday that Osmond, the founder of pubs group Punch Taverns and ex-owner of PizzaExpress, might consider upping the ante while he scratched for additional leverage from well-heeled partners and continued to push for a postponement of the looming shareholders’ meeting to buy more time. That meeting, which is likely to occur as planned, is expected to cement the demerger process begun last October, and approve formation of two separate 6C groups: InterContinental Hotels Group PLC (IHG) for the lodging and soft drinks entity that will include more than 3,300 Holiday Inn, InterContinental and Crowne Plaza hotels, and retail unit Mitchells & Butlers PLC (MAB) for the 2,000-unit All Bar One and O’Neill’s pubs business. Yesterday, Tim Clarke, 6C’s chief executive, pushed for the separation. “We urge shareholders to vote in favor of the demerger which the board unanimously believes will deliver maximum value and choice,” he said in a prepared statement. “CMI has had since Oct. 1, 2002, when we announced the plans for our demerger, to prepare an offer for Six Continents that would be attractive to our shareholders. In full knowledge of our timetable, and for reasons known only to itself, CMI has chosen to make an offer in the closing stages and to impose a false deadline on our shareholders,” he added. “Voting for demerger on 12th March increases our shareholders choice in contrast to CMIs attempt to railroad our shareholders into delaying the EGM (extraordinary general meeting).” CMI countered by suggesting 6C shareholders should vote against the demerger so they can “gain time to make a proper choice,” according to a Dow Jones report. Proxies are due this Monday, March 10, at 10:30 a.m. (GMT). With the demerger, current shareholders will get 50 IHG shares and 50 MAB shares for every 59 Six Continents shares they hold, plus 81 pence ($1.28 U.S.) per share in cash. Six Continents is slated to return $1.1 billion (£700 million) of capital to shareholders by April 23. The shares for the new entities would begin conditional trading on April 7. The 6C board reportedly can withdraw the demerger up until April 14, the date when 6C will hold a “court hearing” to confirm the reduction of capital of Mitchells & Butlers, which effects the separation; however, if shareholders approve the separation on Wednesday, they would not be involved in that withdrawal process or decision. IHG and MAB are expected to begin unconditional trading on April 15.