While the Orient-Express Hotels board of directors promised to respond to Tata Group’s buyout offer within three weeks, the luxury hotel company could see competing offers from its other shareholders.
British newspapers reported that U.K. billionaire brothers David and Simon Reuben, who control 6.2% of Orient-Express, consider Tata’s offer of US$12.63 per share to be undervalued and may counteroffer at US$16 a share.
Tata subsidiary Indian Hotels Co., Mumbai, India, announced on Thursday an unsolicited offer to buyout Orient-Express Hotels, Hamilton, Bermuda, at a 40% premium. Indian Hotels Co. said it would finance the buyout, which would reportedly total US$1.86 billion, with both equity and debt. Indian Hotels Co. also entered into an agreement with Charme II, a private equity fund managed by Montezemolo & Partners, Rome, to sell a minority stake in Orient-Express for US$100 million should the buyout proceed.
Orient-Express Hotels founder James Sherwood is reportedly backing the offer from Tata.