update, page-15

re: tuan sing offers 1.30....article Offer still below NTA and valuation of $1.40 - board to reject bid and proceed with sale of assets. Let them take their time, prices are only rising.

"SHAREHOLDERS in takeover target Grand Hotel Group have voted to wind it up and approved the sale of the company's $500 million-plus hotel portfolio, in defiance of a raised bid offer.
The endorsement at the group's annual general meeting yesterday places Grand's board in a stronger position to negotiate the future of the company, which is the subject of a takeover bid from its majority shareholder, Singaporean-based Tuan Sing Holdings, and a fund managed by Morgan Stanley Real Estate.

The bidders raised their offer from $1.10 to $1.30 per share yesterday - both below the company's share price and net tangible asset backing.

Tuan Sing Holdings, which owns 25 per cent of the hotelier, made its bid conditional on Grand's board not moving to wind up the group by selling off its assets, placing more power in the hands of Grand's directors.

"The shareholder vote today does not affect our joint bid with Morgan Stanley Real Estate," Tuan Sing Australia chairman Sean Hughes said yesterday.

"We are moving forward with this $1.30 per security bid as rapidly as possible ... if the (Grand) board were to proceed to break up the portfolio then we would be unwilling to proceed."

Grand chairman Bill Conn said the group would meet this week to consider Tuan Sing's latest offer, but analysts said it was unlikely the board would accept the deal because it had previously rejected offers on the grounds they were below the group's net tangible asset price of $1.33 per share.

"It's hard to see that the board could recommend an offer below NTA given previous comments and that one of the conditions of the asset-realisation program was that it would realise at least NTA," one analyst said.

Jones Lang LaSalle Hotels, understood to be brokering the sale of Grand's assets, has said the $1.33 NTA is achievable and investment bank UBS has placed a $1.40 per share valuation on the group.

Grand owns five-star Hyatt hotels in Melbourne, Perth, Adelaide and Canberra, two Chifley hotels and one Country Comfort.

Mr Conn said the resolution to sell Grand's assets was being presented against the background of strong conditions in the hotel sector and a strong current operating performance.

"The board is presenting the resolution to approve the orderly realisation of assets to preserve the board's flexibility and ability to maximise value for all shareholders," Mr Conn said.

Under corporate regulations, Tuan Sing must obtain 62.6 per cent of Grand for the takeover to proceed.

Babc & Brown, which has a 15 per cent stake in Grand, said it would accept the offer in the absence of a higher proposal, potentially giving Tuan Sing 40 per cent of the Group.

The underperforming Grand was the subject of an 85c per share takeover bid for the group in August, which led Grand's board to last month announce it would move to wind up the company to realise its net tangible asset value of $1.33 per share.