|ITC chairman Y.C. Deveshwar
in Calcutta on Friday.
Picture by Kishor Roy Chowdhury
Calcutta, July 24: ITC today invited hotel rival EIH to explore future development jointly, after toying with the possibility of a hostile takeover of the Oberoi company for years.
Yogi C. Deveshwar, chairman of ITC, said the company was open to collaborating with other hotel companies, including EIH and Hotel Leelaventure. ITC has stakes in both the companies.
He ruled out a hostile takeover of EIH, in which it has a 14.98 per cent stake. Deveshwar said the investments in EIH and Hotel Leela had appreciated Rs 600-700 crore.
We are not interested in a hostile takeover. If the other side wants to join hands with us, it (stake) will come in handy, Deveshwar said, while addressing shareholders at the annual general meeting today.
He later told reporters that separating ownership, management and marketing was possible in the hotel business.
We could market the brands under the same umbrella, he said. Observers said he might be suggesting an arrangement where ITC owned the company and its properties, while the management and brand remained with the rival.
The overture by the ITC chairman clearly demonstrates his groups eagerness to grow the hospitality business in the days to come. We are hungry, Deveshwar said, while referring to ITCs ambition in hotels.
S.S. Mukherjee, vice-chairman of EIH, declined to comment on Deveshwars proposal. I have not heard anything, so I cant say, he said. EIHs promoters, the Oberoi family, hold about 46 per cent in the company.
EIH, which owns the Oberoi Grand in Calcutta, has properties abroad.
ITC has hardly any debt on its books. It has a huge cash pile to grow organically or otherwise. It has acquired land in several cities such as Amritsar, Coimbatore, Bhubaneswar, Ahmedabad, Hyderabad and Bangalore.
ITC is building a 470-key hotel next to ITC Sonar in Calcutta and negotiating for a property in Gurgaon. The company has 2,900 rooms under the Luxury Collection brand and around 6,100 middle-range rooms under the Fortune brand.