D. E. Shaw Discloses 5.7% Stake in Orient-Express Hotels (OEH), Expresses Concerns With Share Structure
In a 13D filing on Orient-Express Hotels Ltd. (NYSE: OEH), D. E. Shaw and affiliated funds discloses a 5.7% stake (2,256,365 shares) and a disclosed a letter to the company expressing certain concerns with respect to the Company's corporate governance structure, including the rights of the Company’s Super Voting Class B shares and whether owners of the Company’s Class A shares will have the opportunity to hold a definitive and binding vote regarding a merger or sale of the Company should a proposal be made.
The firm said the lack of clarity on these points may (i) hinder interested parties from making such a proposal and (ii) create an unnecessary and significant valuation discount.
From the Letter:
"As shareholders of OEH we have become increasingly concerned by the public communications between the Company and Indian Hotels. The continuation of this unproductive dialogue threatens to impose substantial costs on all shareholders. To address the root cause of this problem, which we believe lies in widespread confusion regarding the Company’s corporate governance structure, we strongly encourage the Board to immediately and publicly clarify the rights of the Company's Super Voting Class B shares and how the Company intends to use these shares in the event a fair and equitable offer for the Company as a whole is received. Specifically, the Board should indicate whether or not owners of the Company’s Class A shares will have the opportunity to hold a definitive and binding vote regarding a merger or sale of the Company should such a proposal be made. The lack of clarity on this point may be hindering interested parties from submitting proposals and is creating an unnecessary and significant valuation discount.
We trust that the Company will see fit to provide satisfactory clarity on this issue. Should the Company fail to respond adequately to our concerns, we reserve our rights as shareholders to take any actions we may deem appropriate."
NOTE: Orient-Express has been the target of takeover approaches from Indian Hotels and the Dubai Investment Group.