Orient takes steps to delay Tata takeover
US luxury hotel chain Orient-Express, where Tatas have become the second largest shareholders, has said takeover talks could affect its share price, even as anti-takeover measures are in place. However, time could be running out for the cosy position of the OEH management which could soon be derailed by hedge funds. Such intervention has helped steel tycoon Lakshmi Mittal’s hostile takeover of Arcelor in face of a hostile management.
The OEH in its annual report for 2007, being sent to its shareholders, said share price can fluctuate significantly due to various factors including market speculation about a potential acquisition of OEH. The company has made it clear that any hostile offer was bound to fail in the current scenario and any such bid would need to win over the company’s board and management.
According to the report, Indian Hotels holds 11.5 per cent Class A common shares of the company, making it the second largest stakeholder after Bermuda-based Orient-Express Holdings Ltd (29.8 per cent). The Tatas may be new to this kind of resistance from the management but they are the favourites of the shareholders which was seen in the takeover of the Corus and could possibly be repeated in the Jaguar-Land Rover deal. In the Corus deal, Tatas had got the support of the Corus board and everything was moving smoothly until the Brazilian steel major also announced its bid for Corus. The board then decided to look at the Brazilian bid. But the takeover panel stepped in and said that there should be bidding and the Tatas sailed to victory.
In the ongoing Jaguar deal, it is the workers who seem to be in favour of the Tatas. There has been some racist sentiments coming out of the US where they feel to have the Jaguar brand under an Indian group. But such sentiments collapse out before good business sense as was seen in the Arcelor takeover.
Tags: jaguar, luxury hotel, Orient, tata