The battle between the two sets of shareholders of global luxury hospitality chain Orient-Express is entering a new terrain. The US based hotel company, which has a dual ownership structure with Class B shares having super voting rights, has been facing investors ire who hold the Class A shares.
Dissident shareholders, led by global hedge funds DE Shaw and CR Intrinsic, have been asking for dissolving the dual ownership structure as it allows the board members (holding Class B shares) to block any takeover attempt.
Among those who hold Class A shares include Tata Group firm Indian Hotels (the single largest shareholder) which had earlier proposed to acquire the hospitality chain. However, the management of Orient Express had rebuffed the proposed deal.
The two hedge funds had convened a meeting to vote for eliminating the dual class shareholding structure of the company. This move was voted down on October 10.
According to this AP , the two hedge funds have said that initial vote count showed that most of the company's Class A shareholders supported their proposal to change the company's corporate structure. The investor groups said that around 95% of the Class A shares represented at the meeting (around 70% of all outstanding Class A shares) supported the proposals.
The hedge funds have said that they have requested a meeting with the board and reserve all of their legal rights if they do not reach "an acceptable resolution". Earlier the funds had indicated that they may look at going to the court if their proposal is defeated.
Orient-Express management who hold Class B shares has stated that the corporate structure preserves the board's ability to oppose hostile takeovers and proposals that would be harmful to the interests of the company and its shareholders.
The company's shares are trading at around $14, close to its one year low. Tatas and Dubai's Jumeirah Assets (another large shareholder) had made separate offers to buy the firm out at approximately $60/share.