Orient-Express rejects $1.2 billion offer from Indian Hotels

Thu Nov 8, 2012 11:49pm IST

An attendant holds a trolley loaded with the luggage of a guest at the reception area of the Tata Group's Indian Hotels Co. Ginger chain in Ahmedabad May 5, 2012. REUTERS/Amit Dave/Files

An attendant holds a trolley loaded with the luggage of a guest at the reception area of the Tata Group's Indian Hotels Co. Ginger chain in Ahmedabad May 5, 2012.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   
Election 2014

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

REUTERS - Orient-Express Hotels Ltd (OEH.N) rejected a takeover offer from Indian Hotels Co Ltd (IHTL.NS), controlled by India's Tata Group, saying the $1.2 billion bid undervalues the company.

"The Indian Hotels proposal ... is deeply unattractive from a financial perspective," Orient-Express Chairman Robert Lovejoy said in a statement.

"The board believes the current macroeconomic environment, conditions in the luxury hotel business and factors unique to Orient-Express would make this a highly disadvantageous time to sell the company to realize its true value."

An Indian Hotels spokesman declined to comment, saying the company was still evaluating its response.

In a letter to Indian Hotels, Lovejoy said the company made the proposal at a time when the price of Orient-Express shares was significantly depressed.

Shares of Orient-Express, which operates the Hotel Cipriani in Venice and the '21' Club in New York, have fallen nearly 85 percent from their all-time high of $65.36 in 2007. They last traded above the $12.63 offer price in March 2011.

The luxury hotels group also named John Scott as its new chief executive, replacing interim CEO Philip Mengel. Scott was earlier CEO of Rosewood Hotels & Resorts from 2003 until its sale in 2011.

Indian Hotels owns a 7 percent stake in Orient-Express. It had offered to form a strategic alliance with the U.S. company in 2007 but was rebuffed.

The Indian hotel chain has bought several overseas properties, including the Pierre in New York, but they have not tended to perform as well as its domestic operations, which include its flagship Taj Mahal Palace in Mumbai.

Shares of Orient-Express were down 5 percent at $11.30 on Thursday on the New York Stock Exchange. Indian Hotels shares closed at 63.30 rupees on India's National Stock Exchange.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Maju Samuel and Saumyadeb Chakrabarty)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Eyeing Role

Eyeing Role

Top economist Jagdish Bhagwati eyes role in Modi government  Full Article 

Election 2014

Election 2014

Breakingviews: Singh wasn’t king, Modi could be  Full Article 

Telecom Sector

Telecom Sector

Japan's NTT DoCoMo to exit India telecoms joint venture - sources  Full Article 

Next Nokia CEO

Next Nokia CEO

Nokia to name Rajeev Suri as next CEO on Tuesday - report  Full Article 

Conspiracy Lawsuit

Conspiracy Lawsuit

Apple, Google agree to pay over $300 million   Full Article 

Stock Split Trend

Stock Split Trend

Trend-setter Apple's stock split could bring out the copycats  Full Article 

Winning Start

Winning Start

Microsoft beats Wall Street on new CEO debut   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage