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Orient-Express Hotel Group Rejects Tata Offer

November 9, 2012 at 9:53 AM | by | ()

Indian Hotels offer to buy the Orient-Express luxury brand is met with a "no"

Orient-Express Hotels Group has turned down the surprise buyout offer from Tata Groups’, Indian Hotels Company, saying the proposed $1.2 billion price tag was not enough and came at an inappropriate time.

Though Orient-Express said they would take three weeks to decide, they made the decision earlier, stating, The Indian Hotels proposal “..is deeply unattractive from a financial perspective," said Orient-Express Chairman Robert Lovejoy. Further, "The board believes the current macroeconomic environment, conditions in the luxury hotel business and factors unique to Orient-Express would make this a highly disadvantageous time to sell the company to realize its true value."

Indian Hotels’ initial offer was $12.63 a share for stocks (a 40% premium). Meanwhile OEH closed yesterday at $10.55 a share.

This isn't OEH's first time rejecting a suitor. They’ve also turned down solicitations from the Dubai-based Jumeirah Group as well.

It doesn't appear that Tata is taking “No” for an answer though. In a brief release yesterday, the company wrote “The Indian Hotels Company and Montezemolo & Partners on behalf of Charme II Fund today acknowledged the recent announcement by Orient-Express Hotels Ltd., and are reviewing the position taken by the Orient-Express Board and considering their options with respect to their offer to acquire Orient-Express. Bank of America Merrill Lynch is serving as sole financial advisor to Indian Hotels, Shearman & Sterling LLP is serving as legal adviser to Indian Hotels, and Hotel Adviser (UK) Ltd is providing industry expertise for the proposed transaction.”

The proposed transaction? It seems they didn't get the memo. You've been shut down!

Or like their unsolicited offer, Tata may choose to up the ante as OEH does seem to agree that they might be available for purchase. It just appears to be a matter of how much they're selling themselves for. Perhaps their newly hired chief executive, John M. Scott may convince shareholders to be more amenable to an offer that doesn't appear to capitalize on OEH's current low share price, which apparently, was Tata's gaffe.

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