Hedge Fund D.E. Shaw & Co Files Amended 13D on Orient-Express Hotels (OEH) ~ market folly

Thursday, January 29, 2009

Hedge Fund D.E. Shaw & Co Files Amended 13D on Orient-Express Hotels (OEH)

The $33 billion hedge fund D.E. Shaw & Co has filed an amended 13D with the SEC disclosing a 6.3% ownership stake in Orient-Express Hotels (OEH). Keep in mind this is an ongoing situation and is not a new filing, but merely an amended one. Their aggregate amount beneficially owned is 3,218,678 common shares. You can view the rest of their portfolio holdings here. The filing was made due to activity on January 12th, 2009. On that date as per the filing, D.E. Shaw,

"... filed a petition in the Supreme Court of Bermuda (the “Petition”) against the Issuer, the Issuer’s subsidiary Orient-Express Holdings 1 Ltd. (“OEH 1”) and the members of the Board alleging, among other things, that the Issuer’s current ownership and voting structure is unlawful under Bermuda law, and that the Board exercised its fiduciary powers for an improper purpose in causing or procuring OEH 1 to acquire, hold, and/or vote Class B Shares of the Issuer (the “Class B Shares”). The Petition requested, among other things, that the court issue orders (i) providing for the classification of the Class B Shares as non-voting treasury shares pursuant to Bermuda law, (ii) providing for the cancellation of the Class B Shares, (iii) restraining OEH 1 from exercising voting rights with respect to the Class B Shares, and/or (iv) providing such other relief as the court may deem proper."

D.E. Shaw was founded in 1988 by David E. Shaw and manages around $33 billion as of December 1st 2008. They focus on intertwining technology and finance and are a hedge fund, private equity firm, and technology development shop all in one. They employ mainly quantitative strategies and do a lot of statistical arbitrage. Shaw oversees strategic maneuvers at the firm, but no longer is active in the day to day operations. He received his Ph.D. from Stanford University. Some notable former employees include Jeff Bezos (before founding Amazon.com) and Lawrence Summers, who recently left the firm to serve on President Elect Obama’s economic team. In Alpha's latest hedge fund rankings, D.E. Shaw is ranked 6th in the world.

Taken from Google Finance,

Orient-Express Hotels is "a hotel and leisure group focused on the luxury end of the leisure market. The Company owns and/or invests in 51 properties consisting of 41 individual deluxe hotels, two restaurants, six tourist trains and two river cruise businesses. These are located in 25 countries worldwide."

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