Comments
Stage I: In March 2012, the Ferrari F12 Berlinetta was unveiled by Ferrari Chairman Luca di Montezemolo. Right by his side were Tata Group Chairman Ratan Tata and Deputy Chairman Cyrus Mistry.
On October 10, it was announced that Montezemolo would become Vice-Chairman of UniCredit, Italy’s biggest bank by assets. Montezemolo was already on the UniCredit board. Tata and Montezemolo are also directors of Fiat SpA, which owns Ferrari, that used to have a tie-up with Tata Motors.
On October 18, India’s biggest hotel operator Indian Hotels Company Ltd (IHCL) made a bid for luxury chain Orient-Express Hotels. Montezemolo’s family fund, Charme II Fund managed by Montezemolo and Partners SpA, is to invest $100 million for a minority stake in the new group. Charme II Fund was set up to invest in top companies with strong ties to Italy.
Stage II: In 2007, Paul White, the then chief executive of Orient-Express, rebuffed a bid by IHCL. In a strong letter to R. K. Krishna Kumar, Vice-Chairman, Indian Hotels, he said he didn’t believe “there is a strategic fit between your predominantly domestic Indian hotel chain and our global portfolio of luxury hotels. We believe any association of our luxury brands and properties with your brands and properties would result in a reduction in the value of our brands.”
Krishna Kumar was provoked to seek an apology. It never came.
In July 2011, Paul White quit Orient-Express’s board.
October 2012: White is now advising the consortium that has bid for Orient-Express. He continues to hold 0.1 per cent (83,000 shares) in Orient-Express.
White’s affiliate company, Hotel Advisor (UK), has also been roped in for strategic assistance. He will get equity compensation.
An interim investor agreement has been signed by the Tatas, Montezomolo’s Charme II fund, and Paul White to create an acquisition vehicle.
NOT INTERESTED
IHCL said it launched a bid after Orient-Express indicated it would “not be interested” in an equity investment. In a note dated October 18 to Philip R. Mengel, Interim Chief Executive Officer at Orient-Express Hotels, Krishna Kumar said, “the offer deserves careful consideration by your Board of Directors”.
At a meeting on August 15Orient-Express Board indicated it would not be interested in exploring a transaction involving a significant investment by IHCL.
Orient-Express has confirmed receiving an ‘unsolicited letter’ from IHCL, which it will evaluate ‘carefully and respond’, says a statement on its Web site. The Indian major expects to get a response to its hostile bid in the next three weeks.
> amritanair.ghaswalla@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.