(Corrects bid value in story and headline to $1.2 bln from
$1.42 bln sent earlier)
By Aditi Shah
MUMBAI Oct 18 Indian Hotels Company Ltd (IHCL)
has made an unsolicited $1.2 billion bid for U.S.
luxury hotels group Orient-Express Hotels, which turned
down an offer in 2007 to form a strategic alliance.
IHCL, controlled by Tata Group, said on Thursday it was
offering $12.63 per Orient-Express share, a 40 percent premium
to the stock's Wednesday close.
Orient-Express stock rose 23 percent to $11.07 at 1637 GMT.
"Indian Hotels is seeking friendly transaction negotiations
and is prepared to devote all necessary resources to mutually
beneficial agreement," the company said in a statement.
IHCL, which owns the famous Taj Mahal Palace hotel in
India's financial capital of Mumbai, has secured funding,
including debt, for the transaction from Bank of America N.A,
ICICI Bank and Standard Chartered Bank.
It has also entered into an agreement with Italian group
Charme II Fund, managed by Montezemolo and Partners S.p.A, under
which it would invest $100 million for a minority stake in the
newly combined group.
Under the terms of the proposed transaction, Orient-Express
would remain an independent company with an independent
management team. IHCL would also take over Orient Express debt
which stood at $529.5 million at June 30.
In 2007 IHCL acquired a 10 percent stake in Orient-Express
for about $211.3 million. It now owns about 7 percent.
IHCL has 99 hotels in 56 locations across India and 16
international hotels including The Pierre Hotel in New York.
Orient-Express owns or part-owns and manages 46 luxury
hotels, restaurants, tourist train and river cruise properties
in 23 countries.
Bank of America Merrill Lynch is advising IHCL.
(Additional reporting by Aradhana Aravindan; Editing by Helen