Indian Hotels makes $1.86-billion offer for Orient-Express. The Tata group company and Charme II Fund, an Italian fund, have jointly written to Orient-Express Hotels to buy all the outstanding shares at $12.63 a share in cash, Indian Hotels said in a late evening press release. Indian Hotels has been a shareholder of Orient-Express for over five years and now holds about 7 per cent of Orient-Express’ Class A stock.
It had earlier made an offer for an alliance with the luxury hotel chain, which Orient-Express had rebuffed. In December 2007, Orient-Express told Indian Hotels that it did not believe there was a strategic fit between Indian Hotels and its own global portfolio of luxury hotels and travel experiences.
It had even said that any association of its luxury brands with the Taj’s brands and properties would result in a reduction in value of its brands and businesses. Indian Hotels had acquired close to 11 per cent stake in Orient-Express for almost Rs 1,300 crore.
In the press release, Indian Hotels said that the all-cash offer represented a 40 per cent premium to Orient-Express’ closing stock price on October 17, the last trading day prior to this announcement; a 45.2 per cent premium to Orient-Express’ 10-day trading average of closing stock prices; and a premium to the 52-week closing high of $ 10.90 a share.
The Hamilton, Bermuda-headquartered Orient-Express Hotels has a chain of 45 hotels, cruise and luxury rail businesses in 22 countries.
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