Plot thickens as Reubens take stake in Orient-Express

12 August 2007 - The Sunday Telegraph

The billionaire Reuben brothers are understood to have built a secret stake in Orient-Express Hotels ahead of a bidding war that could see the troubled luxury hotel group brought home to Britain.

The group has been the subject of continual takeover speculation in recent months and the emergence of the Reuben brothers on the share register is likely to spark further expectations that an auction could develop. The possibility of a British buyer would also be a satisfying antidote to the current trend of top British firms being bought by foreign companies.

David and Simon Reuben, who are chiefly known for their property exploits, are understood to have built a stake of just under five per cent in their own names. Orient-Express Hotels, which owns the eponymous train as well as dozens of the world's most prestigious hotels and restaurants, has attracted a spate of interest in recent months after being spun out of crisis-ridden Sea Containers, which is currently in chapter 11 bankruptcy protection in the US. The famous Venice-Simplon-Orient-Express was immortalised in the film version of Agatha Christie's Murder on the Orient Express.

The group has been the object of takeover speculation in recent months. Derek Quinlan of Quinlan Private, which already owns the Savoy and Claridges hotels, has been linked with a bid for the group. Lehman Brothers is believed to be interested. It is also believed that Jonathan Marland, the former Tory treasurer, may be interested in putting together a consortium to bid for the group. Marland recently made the headlines after he led a consortium to buy the upmarket wellington firm Hunter.

But the Reubens' interest will come as a surprise. Though the Reubens themselves declined to comment, one hotel industry executive who knows them well said: "It wouldn't surprise me as everyone has taken a look at Orient-Express Hotels and it's just the sort of opportunity they would seize upon."

One source said an outright acquisition could cost in the region of $3bn (£1.48bn) but sources in the City believe the Reuben brothers will not be looking at a bid themselves but upping their stake in case Marland and others can bring the US-listed company to these shores.

Reports earlier in the year tipped Merrill Lynch, which handled the group's flotation in 2000, to be appointed as advisers to Orient Express after it received approaches from a range of potential suitors.

But a US source close to the company said last night that the hotels group has not appointed any advisors for a sale and that a newly appointed CEO suggests no sale process is imminent.

Orient-Express owns, part owns and manages 49 hotels, restaurants, tourist train and river cruise properties in 25 countries. These include Le Manoir aux Quat'Saisons in Oxfordshire, the Cipriani in Venice, the Windsor Court in New Orleans and New York restaurant "21" Club