February 28 2020
Tata group firm Indian Hotels makes $1.86 bn offer to buy Orient Express
19 October 2012

In a second attempt to take control of US-based Orient Express, Tata group firm Indian Hotels on Thursday made an $1.86 billion offer to acquire the international luxury hotels operator.

Indian Hotels, which holds about 7 per cent in Orient Express Hotels, termed the all-cash offer as "compelling".

The all-cash offer of $12.63 per share is at a 40 per cent premium to Orient-Express' closing stock price traded on NYSE on October 17. The offer by Indian Hotels along with Charme II Funds includes the hotels operator's debt burden.

Following the offer, shares of Orient Express soared over 28 per cent on the New York Stock Exchange to $11.62.

Once the transaction materialises, the deal would create one of the world's major portfolios of luxury hotels and resorts. Indian Hotels operates the iconic Taj properties in India and abroad.

"We believe this premium all-cash offer represents a compelling and immediate value proposition for Orient-Express' shareholders and provides Orient-Express with access to the additional capital necessary to preserve its properties and heritage while potentially expanding its footprint," Indian Hotels Vice Chairman R K Krishna Kumar said.

In 2007, Tata group had attempted to increase its stake in the US entity but the efforts failed due to stiff opposition from the then management of Orient Express.

The latest offer by Indian Hotels comes just months ahead of Group Chairman Ratan Tata's retirement in December, 2012.

Cyrus Mistry will succeed Tata.

Indian Hotels in its letter to Orient Express has said it was "disappointed that your board of directors has indicated they would not be interested in exploring a transaction involving a significant equity investment by IHCL".

However, the letter said IHCL continues to believe that a transaction between the two organisations is both financially and strategically compelling to respective shareholders.



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