Indian Hotels abandons $1.2 billion bid for Orient-Express
Indian Hotels Company, owner of the Taj Mahal chain of hotels and resorts, will not pursue its USD 1.2 billion bid to acquire US luxury hotels group Orient-Express Hotels, it said on Friday, ending a year-long chase.
The company said the board had decided not to pursue the offer after taking into account all factors, including the current economic environment and other opportunities and priorities.
In October last year Indian Hotels, controlled by the USD100 billion salt-to-steel Tata Group, made an unsolicited bid to acquire Orient-Express, in which it has a 7 percent holding.
Orient-Express, which owns the Hotel Cipriani in Venice and the '21' Club in New York, rejected the bid a month later, saying it undervalued the business.
Indian Hotels' quarterly net loss widened to 3 billion rupees for the three months to September 30, compared with a net loss of 63.6 million rupees in the same period last year, after writing down the value of its investments in overseas assets including Orient-Express.
Net sales rose 3 percent to 3.9 billion rupees.
After foregoing the Orient-Express bid, Indian Hotels said it has reduced the value of its holding in Taj International Hotels (HK), the holding company for its international entities including Orient-Express, by 2.87 billion rupees.
Indian Hotels' investors had greeted its unexpected and unsolicited bid for Orient-Express with wariness because of concerns that it would add to the company's debt load.
The Indian company has bought several overseas properties, including the Pierre in New York, but they have not tended to perform as well as its domestic operations, which include its flagship Taj Mahal Palace in Mumbai.