DLF?s bid to acquire a controlling stake in Orient Express Hotels (OEH) is likely to hit a roadblock since the luxury brand is reportedly not interested in partnering with a predominantly ?domestic brand? which doesn?t have the wherewithal of strategically tying up with a luxury hotel brand.
Given the share-holding pattern of OEH, it is not possible for any company to take over the latter through a hostile bid, making it next to impossible for DLF to take a controlling stake if the latter doesn?t agree.
According to industry analysts, with DLF being reportedly keen in acquiring a majority stake in the international luxury hotel, the race of acquiring the Bermuda-based luxury brand seems to be hotting up. This is likely to lure international hedge funds into increasing their stake in the luxury hotel brand and pushing OEH?s share prices even higher. After the buzz of Tata Group wanting a strategic tie-up with OEH, hedge funds like Steven Cohen?s SAC Capital Management increased their stake in OEH, hoping to get better valuations, if this deal or any other deal in future comes through.
Fuelled by speculations that the firm is in talks for a stake in US-listed global hospitality giant Orient Express, shares of realty major DLF soared by about Rs 10 apiece or 1.5% in an overall weak market. According to industry sources, it is unlikely that DLF would be able to make much headway in their bid because of Orient Express? tough stance against partnering with any brand, which they feel, doesn?t fit into the global luxury brand portfolio. It is on this basis they had rebuffed a much respected and top Indian Group Tata Group, which runs one of the best-known hotel brands in the country, Taj Group.
Industry experts note that with DLF entering the fray, the bid to acquire Orient Express Hotel is going to get even more interesting, as two Indian giants fight it out on the global front to acquire a luxury brand.
OEH CEO Paul White told PTI through a spokesperson in London that he had no comments on the matter. A spokesperson for DLF also said that they would not comment.
