New York-based Orange Capital has issued a letter to the board of directors of Strategic Hotels & Resorts urging for an immediate sale of the company.

Orange Capital is making this letter public after failing to receive an adequate response from Strategic’s board of directors.

Orange Capital is the beneficial owner of 6.25 million shares of Strategic common stock.

Orange Capital believes the sale of Strategic’s properties would likely result in proceeds of USD11-14 per share, a 40-79 per cent premium over the most recent closing price. Orange’s valuation is based upon a property level analysis using capitalisation rates, replacement cost and comparable M&A transactions. It also takes into consideration qualitative variables such as the scarcity value of luxury hotel assets and conditions in the capital markets.

Orange Capital reached this conclusion after a careful evaluation of other possible alternatives, including Strategic continuing on its present course, or a partial sale of the company’s portfolio with proceeds used to retire debt.

Strategic’s hotel portfolio consists of 18 high profile properties, including the Four Seasons in Washington, DC, Silicon Valley and Punta Mita; the Ritz Carlton Half Moon Bay and Laguna Nigel; the Intercontinental in Chicago and Miami; and the Marriott Essex House in New York, among others.