Mumbai-based Indian Hotels went public with a $12.63 per share bid for Orient on Oct. 18, seeking to negotiate a friendly transaction. Indian Hotels, which is backed by Indian family holding company Tata Group Ltd., has been courting the Bermuda-based target since 2007 for either a joint venture or merger but has been turned away at every approach.

Orient-Express chairman J. Robert Lovejoy in a letter to Indian Hotels vice chairman R. K. Krishna Kumar released Thursday argued that shares of his company, like many in the hospitality sector, are weighed down by economic issues in Europe and elsewhere, as well as the company's lack of a permanent CEO. The company on Thursday named one-time Rosewood Hotels & Resorts head John M. Scott III as CEO, and said it believes there is upside to going it alone.

"You continue to state publicly that you are offering a significant premium, but your opportunistic proposal was made at a time when the price of Orient-Express shares has been significantly depressed," Lovejoy wrote. "In short, we strongly believe your proposal is significantly below the value of Orient-Express."

Indian Hotels, which operates nearly 100 locations in India as well as 16 international properties in countries including Australia, South Africa, the United Kingdom and the United States, had hoped to use Orient-Express' portfolio of 40 hotels, six luxury tourist trains, two river cruise ships and the 21 Club restaurant in New York to create a global luxury leisure empire. The company has pledged to allow Orient-Express to remain a separate entity with its own management and directors, but able to tap into the Tata conglomerate's vast resources.

The suitor has said previously it would not go hostile for Orient-Express, so it will be up to shareholders to try to force the company to the table if they disagree with the board's decision. Shares of Orient-Express traded down 10%, or $1.20, Thursday afternoon to $10.70 apiece on the Nasdaq exchange. Before the offer Orient-Express shares had mostly traded at between $8.50 and $9.50 per share.

Deutsche Bank Securities Inc. and Goldman, Sachs & Co. are financial advisers to Orient-Express, with Davis Polk & Wardwell LLP providing legal counsel. Bank of America Merrill Lynch and Shearman & Sterling LLP are advising Indian Hotels on the bid.