India's Tata group subsidiary, Indian Hotels Company (IHC), has made a bid to take over the London- based luxury hotels chain Orient-Express in order to expand its business overseas.
IHC, which already holds about 7 percent stake in Orient-Express, has offered $12.63 per share, totalling $1.86 bn (£1.1 bn), to buy the remaining 93 percent of the shares in the company. The amount adds a 40 percent premium over the company's earlier closing share price.
In a letter to Orient-Express, which was filed with the US Securities and Exchange Commission, IHC said: "We believe this offer is in the best interests of Orient-Express Hotels and its shareholders, and deserves careful consideration by your board of directors".
"We believe this premium cash offer represents a compelling value proposition for the company shareholders, especially in light of the current fragile state of the global economy and the lack of clarity about the prospects for recovery."
According to the letter, the IHC had considered a significant equity investment in the latter earlier this year, but Orient-Express was not interested.
Shares of Tata fell 4.91 percent in India at 07:49 GMT. Orient-Express, which is listed in New York, was up 22.5 per cent at $11.05 on the previous day.
IHC has been trying to increase its stake in Orient-Express for many years, but the latter's management has spurned such moves. The Wall Street Journal reports that in 2008, the then chief executive of Orient Express, Paul White, said that the combination was not a "strategic fit".
However, according to a Financial Times report, White, who had resigned from his post in 2011 for personal reasons, has now joined the Tata group to try for control in the hotel chain.
IHC operates luxury hotels in India under the brand Taj Hotels and Resorts, which includes the Taj Mahal in Mumbai and the Taj Boston; it also runs the Pierre Hotel in New York.