October 19, 2012 9:36:53 pm
A day after making an “unsolicited” offer to take over Orient-Express,Indian Hotels today said their offer is not a hostile bid and it is up to the board of the international luxury hotels chain to respond.
“This is a very friendly offer that we have made to the board of Orient Express. It is not a hostile offer. If it was hostile,we would have gone straight to the shareholders.
“This is an offer to the company. If they feel it is good for the board,the shareholders and ultimately the board will have to reply,” Indian Hotels Company Ltd Vice-Chairman R K Krishna Kumar Kumar told PTI after launching the first Tata Starbucks store here this evening.
On being asked whether the company is ready to increase its offer if there is a counter bid and if it is ready for a hostile offer if management refuses the bid,Kumar merely said: “We will have to see the response of the board and it will take time.”
When asked about the investment of the Italian PE firm Charme,with which,it has made the offer,Kumar said it is USD 100 million and the deal size of USD 1.83 billion is inclusive of the debt of the hotel chain that operates around 45 luxury properties across the world.
If the transaction materialises,the deal will create one of the world’s major portfolios of luxury hotels and resorts for the Taj group.
Earlier in the day,Orient Express,in a statement had termed the Tatas’ takeover bid as “unsolicited,but added that it will evaluate the proposal ‘carefully and respond’ accordingly.
The Tatas had bought 6.7 per cent stake in Orient Express for Rs 1,339 crore in 2007,but its value has plunged by three-fourths now according to the latest market value of its stocks. Moreover,the company has been having a rocky relationship with other stakeholders including the Tatas.
“We have received an unsolicited letter from Indian Hotels Company and certain other members of the Tata Group of companies dated October 18,2012,” Orient Express said in a statement posted on its website.
While it did not spell out its immediate course of action,the firm said,”The board of Orient-Express expects to evaluate the proposal carefully and respond in due course in accordance with the best interests of the hotels and its shareholders”.
Yesterday,Indian Hotels which already holds 6.9 per cent stake in Orient Express since the past five years,had said that it had made a USD 1.86-billion offer to acquire the US-based international luxury hotels chain,including its debt.
The Tatas made an all-cash offer to acquire the outstanding 93.1 per cent stake at USD 12.63 per share,which was a 40 per cent premium on the closing price of its shares on October 17.
This is the second time that Tata Group is attempting to gain control of Orient Express after its failed attempt in 2007 due to stiff opposition from the then management.
In a letter to Orient Express interim chief executive Philip R Mengel yesterday,the Indian Hotels vice-chairman Kumar said,”while we are disappointed that your board has indicated they would not be interested in exploring a transaction involving a significant equity investment by Indian Hotels,we continue to believe that a transaction between the two organisations is both financially and strategically compelling to our respective shareholders”.
As per its website,Orient-Express brand has 45 hotels,cruise and luxury rail businesses spanning 22 countries.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.