By attaching a condition that it would not buy more than 15 per cent of Rajadamri stocks at Bt43 apiece, beyond which sellers will fetch a weighted price between Bt38-Bt43 a share, GS Real Estate Fund is protecting itself from a possible pull-out by William Heineke's Royal Garden Resort Plc.

Heineke, who has raised his 10-per-cent bid for the Thai hotel from Bt27 to Bt38 a share, could always retreat by selling his 25-per-cent stake for a handsome profit and declare victory.

The tactic also allows GS to avoid a fierce if not nasty bidding war which could result in an overpriced Rajadamri Hotel. However, for the shareholders in Rajadamri, the more they sell to GS, the lower the average price they will get, although the minimum price they can expect is Bt38 a share.

Heineke appears to be in the Thai hotel because of Keeree Karnchanapas of the Tayayong Group. With this relatively low investment he would still have some leverage power left to buy an additional 10 per cent to hold a sizeable block.

In the meantime GS, which has bought a 33-per-cent stake in Rajadamri Hotel from EIE International of Japan at Bt38 a share will have to be calculating its costs more carefully than Heineke, for it is also required by the exchange regulations to go for a 100-per-cent tender offer.

A source from the Heineke camp says the group can still raise its bid for Rajadamri Hotel to 10 times more than GS' given the amount of money required to tender for the target company, but even Heineke has to accept that GS has deeper pockets than his.

As 22 per cent of Rajadamri Hotel is held by the Crown Property Bureau and the Thai Farmers Bank and the remaining free-float 20 per cent by minority shareholders, the bidding war may be determined by who gets the support of the Crown Property Bureau and the Thai Farmers Bank.

Last week Chirayu Issarangkun na Ayuthaya, director-general of the Crown Property Bureau, hinted at the prospect of the bureau selling its 6-per-cent stake to whatever party offered the best deal.

In principle, he said, the Crown Property Bureau will consider not only the pricing but also the impact of its decision on minority shareholders.

If the Crown Property Bureau is to sell to Royal Garden Resort, which will stop buying after a 10-per-cent ceiling is reached, other minority shareholders may not have a chance to sell, Chirayu said.

This comment makes it clear that the Crown Property Bureau is more interested in GS' offer, which benefits all shareholders more evenly.

A financial source speculated that it was the Crown Property Bureau which had encouraged GS to bid for Rajadamri Hotel head on against Royal Garden Resort, which originally intended to buy the Thai hotel on the cheap.

With the arrival of GS, which holds a sizeable stake in the Dusit Thani Hotel Group, the Bangkok hotel is flush with the smell of money.