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   Friday 09-Nov-2012

Orient-Express Hotels Rejects IHCL buy-out offer

Says valuation is low; Tata group owned Indian Hotels had bid a 40% share premium price of $12.63 per share or a total consideration of around $1.86 Bn last month

   Mumbai

Orient-Express Hotels, the operator of luxury hotels, cruise and train services in the West, has rejected the offer of Indian Hotels Limited to buyout, stating low valuation as a reason.

Tata group owned Indian Hotels had bid a 40% share premium price of $12.63 per share or a total consideration of around $1.86 Bn last month.

The bid was made in conjunction with the chairman of Ferrari, Luca Cordero di Montezemolo, who had agreed to invest $100 Mn for a minority stake in the newly combined entity.

Indian Hotels is the second largest shareholder in the company with 7% stake. Also the repetitive buying attempts are not startling as the shares of Orient-Express have fallen nearly 85% from their all time high of $65.36 in 2007, throwing opportunities for a good buy.

However this is not the first time that Indian Hotels attempted acquisition of the British hotel giant. In 2007 it had offered to form a strategic alliance that was rebuffed by Orient-Express.

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