Takeover bid for Orient Express not hostile: Indian Hotels

A day after making an "unsolicited" offer to take over Orient Express, Indian Hotels today said their offer is not a hostile bid and it is up to the board of the international luxury hotels chain to respond.

"This is a very friendly offer that we have made to the board of Orient Express. It is not a hostile offer. If it was hostile, we would have gone straight to the shareholders.

"This is an offer to the company. If they feel it is good for the board, the shareholders and ultimately the board will have to reply," Indian Hotels Company Ltd Vice-Chairman R K Krishna Kumar said after launching the first Tata Starbucks store here on Friday evening.

On being asked whether the company is ready to increase its offer if there is a counter bid and if it is ready for a hostile offer if management refuses the bid, Kumar merely said: "We will have to see the response of the board and it will take time."

When asked about the investment of the Italian PE firm Charme, with which, it has made the offer, Kumar said it is $100 million and the deal size of $1.83 billion is inclusive of the debt of the hotel chain that operates around 45 luxury properties across the world.

If the transaction materialises, the deal will create one of the world's major portfolios of luxury hotels and resorts for the Taj group.

Earlier in the day, Orient Express, in a statement had termed the Tatas' takeover bid as "unsolicited, but added that it will evaluate the proposal 'carefully and respond' accordingly. The Tatas had bought 6.7 per cent stake in Orient Express for Rs 1,339 crore in 2007, but its value has plunged by three-fourths now according to the latest market value of its stocks. Moreover, the company has been having a rocky relationship with other stakeholders including the Tatas. "We have received an unsolicited letter from Indian Hotels Company and certain other members of the Tata Group of companies dated October 18, 2012," Orient Express said.

The Tatas made an all-cash offer to acquire the outstanding 93.1 per cent stake at $12.63 per share, which was a 40 per cent premium on the closing price of its shares on October 17.