The future of The Grand in Brighton is in doubt after the hotel's parent company came under pressure to sell.

Leisure group De Vere has been forced on to the offensive after a major shareholder stepped up calls for it to offload its entire UK hotels operation.

The historic Grand on the seafront is the firm's flagship from a portfolio of 21 hotels.

GPG Holdings, which owns ten per cent of De Vere's shares, announced it was making a £118 million offer for a further 25 per cent of the firm.

The move would see two GPG directors pressing for a place on the board to try to force the sale of its hotels division.

GPG believes shareholders are losing out because company accounts state the hotels are worth £551 million at a time when De Vere has a market value of £466 million.

The board of De Vere described the offer as "unsolicited and unwelcome". It has urged shareholders not to sell while it puts together a more detailed response.

Brighton's most famous hotel, which employs 400 people, has made a remarkable comeback since the IRA bombing in 1984, which killed five people.

It has undergone a major rebuilding programme, survived successive boom and bust economies and consistently produced results above industry norms.

Last year, its general manager Richard Baker was named Sussex Businessman of the Year in recognition of his continued success.

Last year De Vere achieved a 2.4 per cent rise in revenues per available room against a drop of two per cent across the market as a whole.

GPG chairman Blake Nixon said efforts to force the De Vere board to create better value for investors had failed and restructuring was long overdue.

At an annual meeting of the company three years ago, GPG sought a de-merger of the group's Village Leisure clubs and Greens health and fitness centres.

By stopping short of launching a hostile takeover bid, GPG said it was allowing shareholders to play a part in increasing the value of their investment.

Wednesday March 24, 2004