Indian Hotels shares at day's low after Orient-Express buyout offer

Shares in Indian Hotels Company, controlled by the Tata Group conglomerate, dropped as much as 3.8 percent in the early trade on Friday, after the company made an unsolicited $1.2 billion bid for luxury hotels group Orient-Express Hotels.

[caption id=“attachment_496237” align=“alignleft” width=“380”]  The all-cash offer of $12.63 per share is at a 40 per cent premium to Orient-Express’ closing stock price traded on NYSE on October 17.[/caption]

Indian Hotels, which said it was rebuffed by Orient-Express in a recent approach to take a “significant” stake in the company, on Thursday offered $12.63 per Orient-Express share, a 40 percent premium.

Indian Hotels shares were down 3.3 percent at Rs 68 , while the main Mumbai market index was down 0.2 percent.

Analysts are wary of the move since the global slowdown severely impacted the hotel industry worldwide. Secondly, there is already a strain on IHCL’s financials as the company’s net debt stands at Rs 3200 crore.

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Agencies