Heinecke said Royal Garden Resort will proceed with its tender offer for Rajadamri Hotel at Bt27 a share now that it has reached an agreement with Mitsubishi Trust and Banking Corporation to acquire a combined 32.3 per cent stake held in the Thai hotel firm by Ransway Company Ltd and Rantack Company Ltd of Japan.

Mitsubishi Trust and Banking Corp is the financial adviser for the two firms, which are holding the stakes in Rajadamri Hotel on behalf of EIE Insurance of Japan.

When combined -- the Japanese stake and its existing stake of 24.74 per cent, which it bought from Tanayong Group last year at Bt25 a share -- Royal Garden Resort will emerge with a total of 57.04 per cent in Rajadamri Hotel.

On March 8, 1999 Royal Garden Resort announced its tender offer for 10 per cent of Rajadamri Hotel at Bt25 a share, with an anticipation that it would be able to secure the 32.3 per cent stake from Ransway Co and Rantack Co.

The stock price of Rajadamri Hotel jumped Bt7 yesterday to close at Bt30.50 on anticipation of the Bt38-a-share counter-bid by Goldman Sachs and Bangkok Hotel Holdings.

However, most shareholders prefer to wait a little bit more for the development of the takeover battle, as evidenced by the fact that only Bt790,000 in value changed hands yesterday on the stock exchange.

Goldman Sachs and Bangkok Hotel Holdings, a joint venture between Charn Issara Group and GS Emerging Market Real Estate Fund LP, sprang a surprise on Thursday when it announced a counter-bid for Rajadamri Hotel for 100 per cent of its shares.

At the Bt38-a-share bid, Rajadamri Hotel is valued at Bt1.7 billion. However, the 100 per cent tender offer, which has already been filed with the Thai Securities and Exchange Commission, is based on the condition that Goldman Sachs and Bangkok Hotel Holdings can acquire a minimum 26 per cent in Rajadamri Hotel.

Korn Chatikavanij, managing director of JF Thanakom Ltd, the financial adviser of Royal Garden Resort, warned against any market exuberance with the Goldman Sachs/Bangkok Hotel Holdings' joint bid as only about 10 per cent of Rajadamri Hotel's stocks are freely floated.

This puts Goldman Sachs and Bangkok Hotel Holdings' counter-bid at risk if it fails to build up its stake in the hotel firm to 26 per cent -- a minimum level that must be acquired otherwise the takeover can be scrapped.

''Investors must be wary about the small number of freely floated shares. If they jump in to buy the stocks now with the hope of selling it off later at Bt38 a share, they might be in for a disappointment. For the bid (from the rival party) will not proceed if it fails to garner at least 26 per cent,'' Korn said.

Speaking from Hong Kong, Henry Cornell, the managing director of Goldman Sachs (Asia) LLC, told The Nation that from his understanding, Royal Garden Resort has not reached any agreement whatsoever with Ransway Co and Rantack Co to acquire their combined 32.3 per cent stake in Rajadamri Hotel.

''The two Japanese firms or any shareholder in Rajadamri Hotel are free to sell their shares,'' he said.

Over the past four weeks Ransway Co and Rantack Co have been holding a private auction in Hong Kong to sell off their stakes in Rajadamri Hotel. The event, according to Cornell, has attracted about a dozen of buyers, including Goldman Sachs/Bangkok Hotel Holdings and Royal Garden Resort.

But since there is no clear outcome from the private auction, Goldman Sachs/Bangkok Hotel Holdings has decided to launch its tender offer in the open market, putting its tender price at 52 per cent higher than that of Royal Garden Resort.

''We want everyone to be happy. And in corporate democracy, everybody is free to sell shares. It's up to the shareholders to decide who is offering the highest price,'' Cornell said.

He added that his group believes in the long-term economic prospects of Thailand and that the tourist industry will be a key positive factor in the development of the Thai economy.