NOT INTERESTED Tatas drop $1.9bn bid for Orient-Express

Mumbai: More than a year after it made an offer to buy Orient-Express Hotels, Tata Group's flagship hospitality company Indian Hotels Co (IHCL) withdrew its $1.86-billion bid for the London-based group amid concerns about the worsening global hospitality slump, taking pressure off chairman Cyrus Mistry. 

    Ever since IHCL, India's largest hotel operator, approached Orient-Express with a buyout proposal, its management had adamantly refused all Tata Group's overtures. It was in 2007 when IHCL had for the first time evinced interest in the Bermuda-registered company. 
    The Orient-Express board's continuous refusal to entertain the offer from the Tatas, the current economic environment as well as the Indian chain's changed priorities triggered the withdrawal, IHCL said in a statement. IHCL owns 6.9% stake in Orient-Express and said that it would look at various options with regard to this holding. IHCL added that it will continue to engage with Orient-Express regarding its investment and may also look at acquiring more shares of the luxury chain. 
    In October 2012, IHCL, best known for operating the Taj chain, made an "unsolicited" offer at $12.63 per share to acquire 93.1% in the luxury trains-to-hotelsto-cruises company. The Tatas had also roped in Ferrari chairman Luca Montezemolo and former Orient-Express CEO Paul White to broker the deal with the NYSE-listed company's board. But the latter rejected the offer, saying that itwas not considering a sale. 
    IHCL's withdrawal of offer for Orient-Express will ease its burden as it is going through a tough period and has been clocking losses for some quarters now, said an industry observer. 
    In a meeting on Friday, IHCL's 10-member board decided not to pursue the transaction and all contracts that were entered into to facilitate the bid have been cancelled, the statement said. 
    IHCL has seen a record decline in its investment in Orient-Express since it first checked into the British hotels group six years ago. Its stake is worth $106 million (Rs 664 crore at current Re-$ exchange rate) based on Orient-Express' Friday trading price. 
    The operator of Taj Mahal Palace in Mumbai and the Pierre Hotel in New York said that global recessionary conditions eroded the value of its investment and for the quarter ended March 31 it had recognized an impairment of Rs 373 crore in its investment in Orient-Express.