The Tata Group promoted Indian Hotels Companys (IHCL) latest attempt at acquiring Orient-Express Hotels is not a hostile bid,IHCLs vice chairman RK Krishna Kumar said on Friday.
If it was a hostile bid,we would have approached the shareholders directly and not gone through the board, he said. Kumar added that IHCL has been in discussion with Orient-Express for the last couple of months and the latters board will take another three weeks to respond.
On Thursday Orient-Express Hotels said on its website that it has received an unsolicited letter from Indian Hotels Company Ltd and certain other members of the Tata Group of companies dated October 18,2012… The firm said,The board of directors of Orient-Express Hotels Ltd expects to evaluate the proposal carefully…
A positive response from Orient-Express though is not a certainty,despite the offer price being 11.5 times the Enterprise Value/EBITA.
The executives of the two companies met in August 2012 but the meeting had ended up in a disappointment for IHCL.
While we are disappointed… we continue to believe that a transaction between the two organisations is both financially and strategically compelling to our shareholders, Kumar wrote to Orient-Express Hotels interim CEO Philip R Mengel.
Shares of Indian Hotels plunged more than 5 per cent on Friday. The scrip closed 5.48 per cent lower at Rs 66.35 on the BSE. Analysts said the fall could be due to the potential debt burden on Indian Hotels.