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

   

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

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

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