• Jumeirah joins hunt for Orient

Jumeirah has joined the Indian Hotels Company in the chase for Orient Express Hotels, it was revealed last week.

But with 81% of the company’s voting shares effectively controlled by founder James Sherwood, it looks unlikely that either suitor will succeed in a hostile bid.

Jumeirah, through its Dubai Holding parent, has acquired a 9.2% stake in OEH. And as with the earlier approach in September from Indian Hotels, OEH has brushed aside any tie-up with Jumeirah.

OEH said in a statement that the board “has no interest in the transaction Dubai Group wish to discuss”. OEH argued that a “standalone business strategy provided the best long-germ value and opportunities for the company and its shareholders”.

The interest from suitors is certainly helping to lift OEH’s share price: it rose 7% after the announcement of Dubai Holding’s stake last Thursday.

Dubai said it has been in contact for some time with OEH about forging some form of business relationship and that it would consider making an offer to acquire control if another third-party attempts to buy the group.

The economic value of OEH is around $3bn which makes it a digestible proposition for the well-capitalised Dubai Holding. The exclusive nature of its assets means that OEH is set to attract a range of suitors and even post-credit crunch, private equity buyers such as Blackstone and Morgan Stanley cannot be ruled out.

Given the limitations on leverage that are currently in place, however, PE buyers have lost much of their pricing advantages.

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