Orient-Express Hotel Group Gets Offer, Not Knowing They Were For Sale
Will the Orient-Express hotels in Cusco keep their names? In three weeks we'll know for sure
This news appeared in our inbox this weekend from an unknown source and we weren’t sure whether it was fact or fiction. Orient-Express Hotels up for sale? Really? Trouble in paradise?
Add the news that the unsolicited all cash offer from Tata Group’s Indian Hotels of $12.63 Per Share (a 40% premium on that day’s closing share price), was a tad on the bold side and we were even more uneasy--why go so high? Yet that would mean a cool $1.86 billion sale for Orient-Express. At least they're getting a higher bid, unlike the discount Jetsetter.com had to offer for its company sale.
Subsequent news briefs confirmed the proposal was definitely real, bold, and that U.S.-listed Orient-Express Hotels Ltd., while in $615.6 million debt wasn't seeking bailout. However, in a statement the company said it will evaluate the proposal carefully and respond in due course in accordance with the best interests of the Orient-Express Hotels Ltd. and its shareholders.
Analysts believe this is just a case of Indian Hotels, which currently owns 7% of OEH’s outstanding shares, even though it has its own debt, seeking to expand its portfolio which includes both Taj and Ginger hotels. Not completely outlandish in the hotelier world, but news all the same for the upstanding OEH with its luxury hotels and resorts in Europe, South America and the U.S.
This isn’t the first time Tata has made these kinds of power plays. It purchased Jaguar Land Rover in 2008 for $2.3 billion and U.K. tea maker Tetley Group for $438 million.
We'll circle back for outcome of this solicitation, said to happen in about three weeks.
[Photo: Orient-Express Hotels]