Marland and the Reubens may join forces in $3bn bid for Orient-Express

13 August 2007 - The Times

The former Tory Party treasurer Lord Marland and the billionaire Reuben brothers could join forces to make a $3 billion (£1.48 billion) bid for Orient-Express Hotels, the company behind the eponymous train and some of the world’s most famous hotels.

The Reubens are expected to confirm within the next few days that they have built a stake of at least 5 per cent in the New York-listed group, while Lord Marland, who recently led a rescue buyout of Hunter, the wellington boot maker, is also believed to have acquired a small holding.

Although the two parties are understood to be looking at Orient-Express separately, Lord Marland is known to be friendly with the Reubens and is expected to discuss the possibility of joining forces to fund a management buyout of the business.

Neither could be reached for comment.

The multimillionaire Tory peer, who has interests in insurance, property development and engineering, is also being tipped to approach some of the wealthy investors with whom he has previously worked on deals.

These include Michael Spencer, of Icap, David Ross, of Carphone Warehouse, and Crispin Odey, of Odey Asset Management.

Lord Marland, who stepped down as Tory Party treasurer in February, is expected to spend the next few weeks putting together a consortium of investors before making a formal approach to the board. He is also believed to be keen to involve James Sherwood, the Orient-Express founder, who recently stepped down as chairman.

The peer, one of the founders of Jardine Lloyd Thompson, the insurance group, is known for making investments in businesses where he works with incumbent management.

He is thought to have no issue with Paul White, who has just been promoted from chief financial officer to president and chief executive, replacing Simon Sherwood, the stepson of the group’s founder.

The latest state of bid interest in Orient-Express comes six months after The Times first revealed that the group had attracted several putative suitors. Starwood Capital, the US property investment firm, has a stake of about 4 per cent, while a US hedge fund is said to hold almost 5 per cent.

Another company that has been running a sliderule over the company is Von Essen Hotels, the owner of country house hotels including Cliveden in Berkshire and the Château de Bagnols in France’s Beaujolais region.

Von Essen is understood to want only its rival’s European hotels, including Le Manoir aux Quat’Saisons, in Oxfordshire.

Orient-Express, which has attracted interest because it owns most of the properties in which it operates, has 39 hotels on five continents including the Cipriani, in Venice; the Mount Nelson, in Cape Town; the Copacabana Palace, Rio de Janeiro; the Observatory, Sydney; and Charleston Place, Charleston.

It also operates six luxury tourist trains, including the Venice Simplon-Orient-Express, The Eastern & Oriental Express and The Royal Scotsman. It part-owns PeruRail and runs the MV Road to Mandalay in Burma, as well as a luxury barge operator in France called Afloat.

Interest in Orient-Express comes at a time of unprecedented corporate activity in the hotel sector, capped by the recently announced $26 billion takeover of Hilton Hotels Corporation by Blackstone Group.

Jones Lang LaSalle Hotels, the real estate adviser, has predicted that deals will reach $110 billion globally this year, up 52 per cent on last year’s record total of $72.5 b