While Tata group firm Indian Hotels Co Ltd (IHCL) is reportedly preparing to sweeten its offer from $1.86 billion to acquire Orient Express Hotels, investors are betting that board of American hotels chain will turn down the offer.

Earlier this month, IHCL offered to take full control of Orient Express Hotels for $12.63 per share. The unsolicited bid represented a premium of 43 per cent on the American firm's 20-day average price.

Following the announcement of the bid, Orient-Express shares enjoyed their biggest gain in more than three years but the stock is still languishing around 9 per cent below the offer price, which shows that investors see the board of the company board rejecting the offer.

Kathleen Renck, chief of event-driven research at FBN Securities, said, "If you don't get agreement with the board of directors, who have all the power, then you can't buy the company, no matter what the price is."

Mergers & acquisitions expert Yemi Oshodi, of WallachBeth Capital LLC, said that the offer wouldn't convince any investor until a friendly deal was put on the table.

It may be noted here that public shareholders do not have the majority of voting rights, and the American company already turned down previous takeover offers from IHCL in 2007.

IHCL already owns 6.9 per cent stake in Orient-Express Hotels, the owner of Manhattan's twenty-one club & luxury lodgings spread from Venice to Rio de Janeiro.