Hotels boss Richard Balfour-Lynn has increased his offer for De Vere as the battle for ownership of Brighton's Grand Hotel intensifies.

Mr Balfour-Lynn, chief executive of Marylebone Warwick Balfour the owners of the Malmaison and Hotel du Vin groups, has tabled an improved £745.4 million offer for De Vere amid continued interest from private equity firm Permira.

The 850p-a-share bid was three per cent higher than the 825p-a-share offer already accepted by De Vere.

The increased offer came after Permira said it may make a rival bid and urged De Vere shareholders to take no action on Balfour's offer, which valued the company at £723.5 million.

The De Vere board said the higher offer was "fair and reasonable" and "in the best interests of De Vere shareholders". Mr Balfour-Lynn tabled the bid through his privately owned investment firm Alternative Hotels Group (AHG).

De Vere runs 19 hotels including the Belfry golf and hotel complex and also has a string of Village leisure hotels, the health and fitness brand Greens and gin maker G&J Greenall.

The De Vere board said that subject to clearance from the Pensions Regulator it would unanimously recommend the AHG bid to its shareholders.

Before last weekend's initial agreement with AHG, Permira said it was prepared to bid up to 840p-ashare for De Vere but the board is understood to have dismissed the indicative offer as too conditional.

The prospect of a bidding war between AHG and Permira has been good news for De Vere shareholders. The stock has soared from 550p in the past year on the back of the takeover interest.

Marylebone Warwick Balfour owns the five star Park Lane Marriott hotel, 15 Malmaison and Hotel du Vin hotels and Liberty's in Regent Street.

Tuesday, July 4, 2006