IHCL may combine with Orient Express

Last Updated: Fri, Oct 19, 2012 16:50 hrs

Mumbai, Oct 19 (IBNS) The Indian Hotels Company Ltd (IHCL), hotel operating company of the Tata Group, has announced that it along with Charme II Fund, an Italian Fund managed by Montezemolo and Partners S.p.A, has sent a letter to Orient-Express Hotels Ltd. proposing to purchase all of the outstanding shares of Orient-Express' Class A common stock for $12.63 per share in cash.

Indian Hotels' and Charme II Funds' proposal, which would create one of the world's preeminent portfolios of luxury hotels and resorts, is valued at approximately $1.86billion, including Orient-Express' net debt.

The all-cash offer represents a 40% premium to Orient-Express' closing stock price on October 17, 2012, the last trading day prior to this announcement, a 45.2% premium to Orient-Express' 10 trading day average of closing stock prices, and a premium to the 52-week closing high of $10.90 per share.

Indian Hotels has been a shareholder of Orient-Express for over five years and currently holds approximately 7% of Orient-Express' Class A stock.

As such, U.S. securities laws require that Indian Hotels publicly disclose its offer.

The Indian Hotels has filed the proposal letter with the U.S. Securities and Exchange Commission (SEC); as part of an amendment of its Statement on Schedule 13D.

"Indian Hotels has great respect for Orient-Express and its collection of unique luxury hotel properties around the world and we are very excited at the prospect of bringing our two great companies and brands together," said R.K. Krishna Kumar, Vice Chairman of Indian Hotels.

"We believe this premium all-cash offer represents a compelling and immediate value proposition for Orient-Express' shareholders and provides Orient-Express with access to the additional capital necessary to preserve its properties and heritage while potentially expanding its footprint."

Kumar said, "While we would have preferred to negotiate confidentially with Orient-Express, US securities laws required public disclosure of our proposal. However, we are prepared to devote all necessary resources to expeditiously complete due diligence.

"We look forward to Orient-Express' prompt reply and the opportunity to engage in further discussions that will result in a mutually beneficial transaction for both companies' shareholders and other constituencies."

A senior IHCL spokesperson together with a Montezemolo Partners' spokesperson assured Orient-Express stakeholders of their deep commitment to the company.

"Orient-Express would remain an independent and autonomous company with its own Board of Directors," he said.

"The active presence of Montezemolo & Partners, as Manager of Charme II Fund, will be extremely strategic for supporting the Italian assets and operations of OEH and for Tata Group it is an ideal partner sharing common ethical values and business principles."

"Orient-Express represents, with its history and iconic assets, a supreme and unique jewel in the luxury hotel industry," said Matteo di Montezemolo, CEO of Montezemolo & Partners.

"We strongly believe in our longstanding partnership with the Tata Group and we are sure that we will together represent the ideal shareholders to further expand Orient Express worldwide business model."

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