The founders and senior managers of Macdonald Hotels have made a bid to take the company private again because the disadvantages of being a listed company are outweighing any benefits.
They have staged a preliminary approach that may lead to a £145m offer at 240p per share for the company, which runs more than 100 hotels and resorts in the UK and Spain.
However, independent director Callum Macleod is romoured to veto the proposed management buyout temporarily, until the estate has been revalued. The last revaluation took place in 1996.
The directors involved are chief executive Donald Macdonald, deputy chief executive Gerry Smith, chairman Frank O'Callaghan and non-executive directors Sandy Orr and Donald MacDonald (no relation to his namesake).
A spokesperson for the chief executive said the company had been thinking about returning to the private sector for some time.
Although Macdonald Hotels has shown consistent growth since its formation in 1990 and flotation in 1996, Macdonald said its performance has not been reflected in its historic share price, which has swung between a low of 130p and a high of 240p.
He added that being a publicly listed company was very time-consuming. "The amount of time spent being a public company was disproportionate to the benefits we got from it," he said.
The senior management and their associates hold as much as 30% of the Macdonalds Hotels shares.
Peter Joseph, an analyst at City stockbroker KBC Peel Hunt, said that the preliminary offer represented a fair price for shareholders, although he added that, if the company were to be delisted, "investors will be losing the opportunity to participate in a company with above-average growth prospects".
Joseph agreed that going private would be a good move for the management. "They have been suffering the inconveniences and costs of being a public company without getting any advantage," he said.
"They have not been happy with the way the share price has reflected the business's underlying value," he added, "and directors' share options have gone down in value for quite a long time. They wanted to use the shares to finance deals, but the price has not been high enough, so they have used joint ventures instead, which can be done just as easily in the private domain."
Future funding is expected to come from the Royal Bank of Scotland (RBS), which is a joint-venture partner in the Heritage properties that Macdonald Hotels bought from Compass.
Joseph thought it unlikely that a rival bidder would enter the fray with a higher offer, because the management offer was fair, because the provincial group lacked a trophy hotel, and because such a bidder would need the approval of RBS.
The company's share price jumped by 23p to 235.5p last Wednesday when the management approach was announced.