GHL Gresham Hotel

RNS Number:7008U
Gresham Hotel Group Plc
17 April 2002


                          STOCK EXCHANGE ANNOUNCEMENT


17th April, 2002


                         Gresham seeks bid from Red Sea

On 4th April 2002, a stake carrying 6.53% of the voting rights in Gresham Hotel
Group plc ("Gresham") was acquired by Irish River Holdings B.V., a subsidiary of
Red Sea Hotels Limited ("Red Sea"), bringing the voting control of Red Sea and
its subsidiaries ("Red Sea Group") in Gresham to 28.25%. Following a contact
initiated by the Gresham CEO, Mr. Patrick Coyle, with Red Sea, a meeting was
held between Red Sea and Gresham and their respective advisers on 10th April,
2002.


At that meeting Mr. Amos Pickel, the Managing Director of Red Sea, requested
that the Board of Gresham be reconstituted so that the Board of Gresham which
currently comprises ten members (five executive and five non-executive) be
reduced to six directors in total, two executive directors and four
non-executive directors. Mr. Pickel further required that three of the four
non-executives would be nominees of Red Sea, one of which would be Chairman.


Mr. Pickel also proposed that one of the Red Sea nominees would be a property
expert with international property experience. At a subsequent meeting Red Sea
financial advisers confirmed that Mr. Harvey Soning, who attended the earlier
meeting would fill that role. We understand from Mr. Soning that he has advised
Red Sea Group on property matters for over 20 years.


At the meeting Gresham stated that to appoint three nominees to the Board of
Gresham, including the role of Chairman, is to effectively cede control of the
Company to Red Sea Group. This, in the view of the Gresham Board, is not in the
best interests of all shareholders.


Gresham offered Red Sea Group representation on the Board, subject to full Board
and shareholder approvals. Gresham also suggested that two of its executives
together with two Red Sea Group executives work on formulating a strategy of
co-operation for the future. This proposal was not acceptable to Red Sea Group.
Red Sea stated that its fundamental requirement was that it wanted the Board to
be reconstituted as outlined above before it would consider making any
definitive proposals or provide a firm view on how Gresham should be developed.


It is the view of the Gresham Board that for a shareholder with 28.25% of the
voting control to gain control of the Board would not be in the best interest of
all the shareholders. This is particularly the case given Red Sea Group's
existing hotel assets in Europe and the obvious potential for conflict of
interest that may arise. It is the Board's view that if Red Sea Group wish to
control the Board then it should make a general offer to all shareholders.


It has come to the attention of the Board that Mr. Harvey Soning is a
co-director with Mr. Ian Ilsley of Your Space Plc an AIM listed company. The
Board is also aware that Mr. Ilsley is the beneficial owner of ordinary shares
representing 4.26% of the voting rights in Gresham and apart from Red Sea Group
is the single largest shareholder in Gresham. The Board of Gresham is extremely
concerned at the possibility that Mr. Ilsley may be a connected party of Red Sea
Group and acting in concert with the Red Sea Group. It has therefore instructed
its advisers, AIBCF, to make contact with the Irish Takeover Panel and to ask
that a full investigation be undertaken into the possible association between
these two parties. The Board has also asked the Panel, through its advisers, to
determine whether Red Sea should be obliged to make an offer to all
shareholders.


Mr Sean Henneberry, the Gresham Chairman, commented "we have made enormous
efforts to determine the requirements and strategy of Red Sea as a major
shareholder of Gresham and to understand how we can best work together in the
interests of creating and enhancing shareholder value. We are very disappointed
by the response from Red Sea as in the opinion of the Board it is now evident
that its strategy is to seek to gain control of the Company without making an
offer to all of the shareholders. Therefore, we would now urge Red Sea to make
an offer to all shareholders.


"We are very focussed on working in the best interests of all stakeholders
(shareholders and employees) who have supported this Company over the long
term."



For inquiries, please contact:

Sean Henneberry, Chairman                      Mon O'Driscoll, Managing Director

Patrick Coyle, Chief Executive                 Peter Coyne, Director

Fiona Gillespie



Gresham Hotel Group Plc.,                      AIB Corporate Finance,

23 Upper O'Connell Street,                     85 Pembroke Road,

Dublin 1                                       Ballsbridge,

                                               Dublin 4
Tel: +353 1 878 7966


                                               Tel: +353 1 667 0233

                                               Fax: +353 1 667 0250




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