On Thursday Orient-Express Hotels rejected Tata Group’s unsolicited US$1.86 billion buyout offer and announced the appointment of a new president and CEO, John Scott III, who most recently was chief executive at Rosewood Hotels & Resorts.
Orient-Express Hotels, Hamilton, Bermuda, said last month’s buyout offer from Tata subsidiary Indian Hotels Co., Mumbai, India, significantly undervalues Orient-Express and its unique assets and is not in the best interests of Orient-Express and its shareholders.
Orient-Express asserted that its portfolio performance is set to improve given that it is currently below peak EBITDA levels. In a letter stating its decline of the offer mailed to Indian Hotels Co., Orient-Express wrote “your opportunistic proposal was made at a time when the price of Orient-Express shares has been significantly depressed. Orient-Express shares have been negatively impacted by various factors including economic turbulence, particularly in Europe, important properties in the midst of refurbishment projects, and the transition to a new CEO … many of our core properties are expected to achieve in 2012 substantially less than their peak EBITDA. In addition, we expect EBITDA to benefit materially as properties undergoing renovations reopen and major new properties commence operations. We are encouraged by the growth in our advance bookings for 2013, which are currently well ahead of last year at this time. In addition, the market value of our unique properties is underscored by the prices per key paid in some recent sales of iconic assets.”
Scott, 47, oversaw at Rosewood a portfolio of 17 luxury hotels located in seven countries with combined revenues of over US$500 million.
Prior to joining Rosewood Hotels, Scott served for seven years as managing director of acquisitions and asset management at Maritz, Wolff & Co. He also held management positions in business planning and development at The Walt Disney Co. and senior hotel management positions at the Interpacific Group Hong Kong.
Philip Mengel had served as interim CEO for the past six months after Paul White resigned in June 2011.
Indian Hotels Co. and Montezemolo & Partners announced they would review the position taken by the Orient-Express board of directors and consider their options with respect to the buyout offer.