The Fairmont Hotels & Resorts Inc. board has unanimously rejected financier Carl Icahn's $1.2 billion bid to take control of the company, calling the offer "inadequate."
Icahn was offering $40 a share for 41 percent of the company through Icahn Partners LP and Icahn Partners Master Fund LP.
Shares of the Toronto-based luxury hotels and resorts operator rose $1.06, or 2.6 percent, to close at $41.05 Thursday on the New York Stock Exchange.
On Nov. 7, the Icahn group said it had acquired a 9.3 percent stake in Fairmont.
Fairmont said the board received written opinions from UBS Securities LLC, Avington International and Scotia Capital Inc. stating the Icahn offer is inadequate from a financial point of view.
The board noted the offer seeks to provide Icahn with control without offering an appropriate change of control premium for the shares purchased or any premium for the shares not purchased.
It added there are risks associated with Icahn's "lack of experience" in operating a company such as Fairmont.
It also said the offer is "highly conditional" and there are other offers or alternatives to the Icahn offer that may emerge that could potentially provide shareholders with greater value.
In launching his bid, Icahn, a well-known "activist" investor, said a takeover by a larger rival would "more effectively take advantage of economies of scale."
Fairmont has more than 80 properties, mostly in North America. The original Fairmont Hotel opened 1907 in San Francisco. The company was bought in 1999 by Canadian Pacific Hotels & Resorts, which took the Fairmont name.