Indian Hotels, an arm of the giant Tata Group, announced Thursday an offer worth $1.86 billion to acquire Orient-Express Hotels, marking its second attempt to buy the Bermuda-based luxury global chain. Indian Hotels Co Ltd and Charme II Fund, an Italian private equity fund managed by Montezemolo and Partners SpA, have sent a letter to Orient-Express Hotels Ltd proposing the purchase, the Indian company said in a statement. \"We are very excited at the prospect of bringing our two great companies and brands together,\" said R.K. Krishna Kumar, vice chairman of Indian Hotels, adding that the Indian firm was seeking \"transaction negotiations\". There was no immediate response from Orient-Express but shares in the New York Stock Exchange-listed company leapt nearly 40 percent on the back of the announcement before retracing to trade up 22 percent at $11.02. In 2007, Orient-Express spurned an offer by Indian Hotels for a tie-up on grounds its brand value might be diluted by an association with the Indian company which owns the premium Taj hotel chain in India and abroad. The rebuff outraged Indian business and Indian Hotels whose parent is the tea-to-steel Tata Group, one of India\'s oldest business houses. Indian Hotels, which owns the iconic seafront Taj Mahal Palace in the financial hub Mumbai that was targeted by Islamist extremists in a 2008 attack in which 166 people died, said it had already acquired a 6.9-percent stake in Orient-Express. It said it now wished to buy the remaining 93.1 percent in an all-cash offer, adding that Orient-Express would remain an \"independent and autonomous company\". Combining with Orient-Express is a \"strategically compelling opportunity\" for both companies as well as for shareholders, Indian Hotels said. The $12.63-per-share bid for Orient-Express, based in Hamilton, Bermuda, represented a 40-percent premium to the company\'s share price before the offer was disclosed, Indian Hotels said. The offer, which would create \"one of the world\'s pre-eminent portfolios of luxury hotels and resorts\", is valued at $1.86 billion including the debt of Orient-Express, the statement said. Orient-Express owns or part-owns 49 properties including 40 deluxe hotels and also offers high-end train and cruise travel, according to its website. In 2007, the company wrote to Indian Hotels saying it did not believe \"there is a strategic fit between your predominantly Indian hotel chain and our global portfolio of luxury hotels\". Indian Hotels in 2007 had proposed such ideas as cross-marketing and luxury holiday packages. The Tata Group responded by calling Orient-Express\'s statements \"pejorative, inaccurate and libellous\" and added that \"Taj Hotels is a proud Indian company and it will persevere with its global expansion strategy.\" Taj Hotels owns 99 hotels in 56 locations in India and an additional 16 international hotels while Montezemolo is an investor in luxury companies and a partner with Tata in another venture. Indian Hotels, whose shares closed up 3.24 percent at 70.20 rupees, said it would finance the acquisition through debt and equity and that the funds needed were already in place.