Indian Hotels Co. has offered to buy Orient-Express Hotels for about $1.86 billion.
Indian Hotels, the parent of Taj Hotels, already owns about a 7% stake in Orient-Express. It is offering $12.63 a share for the rest of the company, or 40% more than Orient-Express’s closing share price on Wednesday, Indian Hotels said in documents filed with the Securities and Exchange Commission on Thursday.
Orient-Express would keep its brand name after the transaction, Indian Hotels said.
Orient-Express Hotels, founded in 1976 with the acquisition of Hotel Cipriani in Venice, operates hotels, restaurants cruises and trains. Other Orient-Express hotels include St. Petersburg’s Grand Hotel Europe and Rio de Janeiro’s Copacabana Palace. The company also owns the 21 Club restaurant in New York.
For the first half of the year, Orient-Express’s net loss narrowed to $3.9 million from $9.75 million a year earlier, as revenue rose 2% to $267.4 million. During that period, the company generated an average room rate of $463 a night.
“We have great regard for Orient-Express Hotels and its irreplaceable collection of unique luxury hotel properties around the world,” Indian Hotels’ Krishna Kumar wrote in a letter to Orient-Express interim CEO Philip Mengel. “We believe this offer represents a unique opportunity to provide a compelling value proposition for the company’s shareholders while also ensuring a stable future for Orient-Express Hotels and its other key stakeholders.”
Taj Hotels, which started operations with the opening of Mumbai’s Taj Mahal Palace in 1903, has 93 hotels globally, including New York’s Pierre and South Africa’s Taj Cape Town.
Indian Hotels is part of India’s Tata Group, a conglomerate that includes more than 100 companies and generates more than $100 billion in annual revenue. Tata Group notably acquired U.K. automaker Jaguar Land Rover from Ford Motor Co. for $2.3 billion in 2008.
Follow Danny King on Twitter @dktravelweekly.