LONDON-The board of hotel group De Vere has accepted a takeover offer from AHG Venice, a vehicle led by property investor Richard Balfour-Lynn, after it raised is offer to 850p from 825p. But private equity firm Permira, urged De Vere shareholders to delay accepting the offer as it works on its own 840p per share proposal. The counter bid would be on behalf of a consortium that also includes the Royal Bank of Scotland and property group Delancey.

AHG Venice first expressed interest in De Vere just over three weeks ago. It already owns Initial Style Conferences, a hotel/conference venue group, which it bought last year. Balfour-Lynn has a track record in hotels, with the Malmaison and Hotel du Vin chains owned by Marylebone Warwick Balfour, the property group of which he is a director.

De Vere will pay AHG Venice a break fee of euro 10.78 million ($13.51 million) should the deal not go through, Thursday’s statement said. In addition, AHG agreed to sell De Vere’s Carden Park Hotel and golf complex in Cheshire for euro 60.8 million ($76.1 million) to Steve Morgan, the founder of homebuilder Redrow, which owns a 13% stake in De Vere and sits on its board as a nonexecutive director. In return, Morgan has agreed to accept the offer from AHG. The hotel is adjacent to Morgan’s personal estate and was built by him.

Under UK takeover rules, such side deals are banned unless other shareholders approve, and the De Vere’s adviser, UBS, has said it is a fair price. Permira is now considering complaining to the takeover panel.

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