New Delhi: Orient-Express Hotels Ltd rejected a $1.2 billion takeover offer from Indian Hotels Co Ltd as too cheap and appointed a new chief executive, saying that it was confident of its prospects as an independent company. The hotel and restaurant owner, whose properties include the Hotel Cipriani in Venice and the '21' Club in New York, has a history of rebuffing takeover approaches.
Its shares closed down 11 per cent at $10.55, taking to 16.5 per cent below the $12.63 offer price. "The Indian Hotels proposal ... is deeply unattractive from a financial perspective. 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," Orient-Express Chairman Robert Lovejoy said in a statement.
Indian Hotels, a unit of Tata Group that has interests ranging from steel to software, said it was considering its options after the rejection. Late last month, it asked to meet with Orient-Express and indicated it could raise its offer, if it had a chance to inspect the firm's books. The $12.63-per-share offer was at a 40 per cent premium to Orient-Express's previous price, and at a level last seen for the shares early last year. Orient-Express shares have fallen nearly 85 per cent from their all-time high of $65.36 in 2007.
"There is no question that the board is correct in that it is not a good time
07:21 AM, Nov 09, 2012