Tatas launch ‘hostile’ bid for Orient Express

Mumbai: Tatas-owned Indian Hotels Company Ltd (IHCL) has launched a bid to control British luxury chain Orient Express Hotels along with Ferrari boss Luca Cordero di Montezemolo and Paul White, who is a former chief executive of the New York-listed leisure group and had once opposed an alliance with India's largest private conglomerate.      IHCL informed the bourses that it would make an offer for 100% shares of Orient Express five years after it purchased a minority stake in  the London-headquartered hospitality giant.      IHCL currently holds about 7% stake and is making an offer to mop up the entire outstanding Class A shares at $12.63 a piece, valuing Orient Express at almost $1.9 billion. This represents a 40% premium to the closing price of Orient Express on Wednesday.      IHCL vice chairman R K Krishna Kumar wrote to the Orient Express interim CEO Philip R Mengel about the unilateral move after failed attempts to strike a partnership, which analysts describe as a bold hostile move from an Indian group little known for boardroom adventures. IHCL will fund the proposed buyout through a combination of equity and debt, with financing coming from Bank of America, ICICI Bank and Standard Chartered. Bank of America Merrill Lynch is advising IHCL on the transaction.  CHECKING IN  Sept 18, 2007: Tatas formally announce Indian Hotels Company (IHC) acquiring 10% in NYSE-listed Orient Express Hotels (OEH) for $211.28mDec 10, 2007: OEH president & CEO Paul White rebuffs Tatas' bid in a letter, despite IHC being single-largest stakeholder with 11.5% Dec 19, 2007:IHC VC R K Krishna Kumar writes to Paul White demanding apology over comments on the 'Indianness' of Taj Hotels, terming them 'pejorative and inaccurate Jan '10: OEH's move to issue fresh shares draws IHC, which now has 9.7% stake Dec '10: IHC skips OEH's FPO, lowers stake to under 8%Will Ratan Tata sign off with Orient hurray?  Mumbai: Tata group hospitality entities will chip in with the equity contribution for the proposed buyout of Orient Express Hotels. Samsara Properties, a 100% subsidiary of IHCL, the owners of Taj Properties, is leading the bid. Ferrari chief Montezemolo's family fund, Charme II, will contribute $100 million in equity making it a broadbased Indo-European bid for the marquee asset.      Orient Express has two types of equity shares-—Class A and Class B, the former listed on the bourses, while the latter is held by OEH subsidiary with disproportionate voting rights. This still leaves the takeover battle an intriguing affair, if the Orient Express board decides to stall the Tata move once again.      IHCL's previous attempts to clinch an alliance with Orient Express were rebuffed by the latter's management led by Paul White, which had led to a clash of words which at times acquired racist overtones. White stepped down as Orient Express chief executive last year, and made a stunning move to the Tata camp, which has bolstered the latest buyout offer.  TATAS' BIG BUYS 1 Tata Steel acquires Corus, Europe's second-largeststeelmaker, for $13bn in 2007 2 Tata Motors acquires Jagaur and land Rover for $2.3bn in 2008 3 Tata Chemicals buys US's General Chemicals for $1bn in 2008 4 Tata Consultancy Services buys Citigroup Global Services for $512m in 2008 5 Tata Global Beverages purchases Tetley for $440m in 20006 Tata Steel snaps up natsteel Asia for $375m in 2005 7 Tata Sons acquires VSNL (now Tata Comm) for $319m in 2002 8 Tata Global Beverages acquires US's Eight OÇlock Company for $220m in 2006 9 Tata Chemicals buys Brunner Mond for $176m in 2005 10 Indian Hotels buys Ritz Carlton for$170m in 2006