Will the Tata Group be second time lucky with the board of Orient Express Hotels (OEH)? Most global analysts and consultants who track the NYSE listed company feel that the board may hold out for a better offer than the $12.63 per share offered by Indian Hotels, a Tata Group company.
A poll of eight analysts and consultants revealed that most expect at least $15-$20 per share valuation for the OEH assets, including an element of so-called control premium.
Most analysts expect counter-offers for the marquee hotel chain from bidders such as Kingdom Holdings, the holding company of Saudi prince Al-Waleed, triggering a possible bidding war.
The OEH board is expected to respond to the Tata offer in 3 weeks and have roped in Deutsche Bank to advise them on their strategy.
Analysts say counter-bids could come in from asset owners rather than asset managers such as Marriot.
There is also a growing buzz that existing shareholders such as millionaire brothers David and Simon Reuben -- who already own 6.2% in OEH - are also preparing a counter offer along with Cohen and Steers Capital, which owns 13% in OEH. Their counter offer is likely to be in the range of $16/share. However, mails sent to them did not generate a response till the time of going to press.
But the OEH board will have the upper hand in any strategic decision having ring fenced the company from hostile takeover attempts. They have creates a tiered share structure with differential voting rights. OEH and its subsidiary owns a majority of shares that gives them the upper hand in any voting decisions. They can also issue preferred shares to dilute the ownership of any hostile acquirer.
Last week, in a research report Barclays analyst Sule Sauvigne said Indian Hotels Company's bid at $12.63/share is " below our estimated value" of OEH, the Bermuda-based owner and operator of hotels, tourist trains and restaurants.