Indian Hotels Company, the hospitality chain owned by the Tatas, has placed an acquisition bid for Orient-Express Hotel Ltd, a company listed on the New York Stock Exchange. The company currently holds over 71 lakh 'Class A' shares of Orient-Express aggregating to 6.9% equity stake, acquired in stages during 2007 and 2009.
The board of Indian Hotels CompanyBSE -4.77 %
(IHC) has given 'in-principle' approval to the management to make an offer to the Orient-Express board seeking their consent for acquiring the balance outstanding 93.1% Class A common shares of the US hotel chain.
Indian Hotels made $1.86 billion offer to acquire the international luxury hotels operator, terming the all-cash offer as "compelling".
The all-cash offer of $12.63 per share is at a 40 per cent premium to Orient-Express' closing stock price traded on NYSE on October 17. The offer by Indian Hotels along with Charme II Funds includes the hotels operator's debt burden.
Following the offer, shares of Orient Express soared over 28 per cent on the New York Stock Exchange to $1.62. Once the transaction materialises, the deal would create one of the world's major portfolios of luxury hotels and resorts. Indian Hotels operates the iconic Taj properties in India and abroad.