US listed Orient-Express Hotels, in which Tata group's Indian Hotels has acquired an 11.5 per cent stake for about 247 million dollars, has rejected an offer for a strategic alliance with the Indian conglomerate.
In a reply to Tatas' proposal for a possible association, Orient-Express, which owns New York's prestigious Club 9 Restaurants and a number of luxury hotel brands in the US and other countries, said in a statement that aligning with Tatas' "predominantly domestic Indian hotel chain" would adversely impact the brand value of its premium properties.
Indian Hotels had first disclosed on September 14 a 10 per cent stake acquisition in Orient through open market purchases and had subsequently sought a possible alliance between the two companies.
Despite Orient-Express rejecting its proposal, Tatas have been pursuing for a meeting to discuss a possible deal and again reminded the company of its proposals in November.
Subsequently, Indian Hotels said on Friday that it has acquired a further 1.5 per cent stake -- taking its total stake to 11.5 per cent for about $247 million.
On Friday, Indian Hotels once again reiterated its intention to pursue a possible alliance with proposals for brining its non-Indian hotels under the Orient-Express fold, holding of minority stakes in each other's equity capital and representation on each other's boards.
However, Bermuda-based Orient Express, through a statement issued late last night, once again rejected the proposal.
"Orient-Express Hotels had previously rejected a similar proposal from the company. The Board of Orient-Express Hotels continues to consider that the IHCL proposal is not in the interests of Orient-Express Hotels and its shareholders and therefore has advised them accordingly," Orient said.
