Two proxy advisory firms back proposals made by Orient-Express shareholder group

By Lisa Kerner

Charlotte, N.C., Oct. 3 - RiskMetrics Group/ISS recommended that Orient-Express Hotels Ltd. shareholders vote for both proposals submitted by shareholders at the special meeting on Oct. 10, according to D.E. Shaw Valence Portfolios, LLC, D.E. Shaw Oculus Portfolios, LLC and CR Intrinsic Investors, LLC.

The D.E. Shaw shareholders want to:

• Amend the Orient-Express bylaws so that any shares owned by the company or its subsidiaries would be treated as non-voting treasury shares; and

• Eliminate the class B shares currently held by the company.

"The dual-class share structure of the company essentially gives no opportunity to shareholders to hold the board accountable on any issues relating to the company through their voting rights," RiskMetrics/ISS said, according to a D.E. Shaw news release.

In addition, RiskMetrics/ISS believes Orient-Express has "repeatedly blocked takeover attempts without giving shareholders a chance to express their views" and "failed to establish a majority independent board," D.E. Shaw said.

Another independent proxy advisory firm, Egan-Jones Proxy Services, also recommends that Orient-Express shareholders vote for both proposals, the release said.

According to D.E. Shaw, Egan-Jones believes it is not in the best interests of the company or its class A shareholders for Orient-Express "to control more than 80% of the voting power on all matters put to a shareholder vote."

It was previously reported that the D.E. Shaw investors are soliciting proxies for the Oct. 10 meeting.

The investors beneficially own a total of 6,053,678, or approximately 14.3%, of Orient-Express' class A shares. They intend to vote all of their class A shares for both resolutions and asked fellow shareholders to do the same.

In a prior news release, Orient-Express said its board's structure is designed "to preserve the board's ability to oppose any proposals that are contrary to the best interests of the company and its shareholders, including coercive or unfair offers to acquire the company."

Orient-Express, a Hamilton, Bermuda-based luxury hotel and restaurant operator, intends to "defend vigorously" any legal challenges to its corporate structure, it was noted in the release.

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