Home > Archive > Indian Hotels Company and Charme II Fund propose to combine with Orient-Express Hotels
Archive Latest Updates

Indian Hotels Company and Charme II Fund propose to combine with Orient-Express Hotels

Read Article

EH STAFFMumbai

The Indian Hotels Company 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  proposing to purchase all of the outstanding shares of Orient-Express’ Class A common stock for US$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 US$1.86 billion, including Orient-Express’ net debt. The all-cash offer represents a 40 per cent premium to Orient-Express’ closing stock price on October 17, 2012, the last trading day prior to this announcement, a 45.2 per cent premium to Orient-Express’ 10 trading day average of closing stock prices, and a premium to the 52-week closing high of US$10.90 per share. Bank of America Merrill Lynch is serving as sole financial advisor to Indian Hotels, Shearman & Sterling LLP is serving as legal advisor to Indian Hotels, and Hotel Advisor (UK) is providing industry expertise for the proposed transaction.

Under the terms of the proposed transaction, Orient-Express would remain an independent company, strongly supported by Indian Hotels, with an independent management team. Indian Hotels is devoted to supporting the continued growth of all of its employees.  The employees of a combined Indian Hotels – Orient-Express will receive the same dedication and support to ensure their development and success.

Indian Hotels has secured the requisite capital to consummate the entire transaction, including debt financing from Bank of America N.A, ICICI Bank and Standard Chartered Bank.  Given Orient-Express’ collection of properties throughout Italy, Indian Hotels also has an agreement in place with Charme II Fund to invest US$100 million for a minority stake in the combined company.  Charme II Fund is managed by Montezemolo & Partners S.p.A., and makes investments in leading companies with strong ties to Italy.

Additionally, Indian Hotels has obtained all necessary approvals from the Indian Hotels Board of Directors, subject to satisfactory completion of due diligence, the execution of a definitive agreement and receipt of requisite regulatory approvals.

Indian Hotels has entered into an agreement with James Sherwood, former chairman and founder, Orient-Express, whereby Mr. Sherwood has agreed to eliminate certain rights he would otherwise have to acquire the Cirpriani Hotel and related assets in the event of an acquisition of Orient Express by Indian Hotels. Indian Hotels has been a shareholder of Orient-Express for over five years and currently holds approximately seven per cent of Orient-Express’ Class A stock.  As such, US securities laws require that Indian Hotels publicly disclose its offer.

RK Krishna Kumar, vice chairman, Indian Hotels said, “Indian Hotels has great respect for Orient-Express and its collection of unique luxury hotel properties around the world and we are excited at the prospect of bringing our two great companies and brands together. 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 added, “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.”

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

Share

Related posts

Corona partners with JW Marriott Hotel Bengaluru to launch urban oasis ‘Merak’

EF&H Staff-Mumbai

HRAWI demands for industry-friendly Budget

Four Points by Sheraton Luohe

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Webinar on the Post Covid-19 Classroom and Career Path
Register Now!
close-image