The transaction will be completed within the next four weeks, in advance of the high season, which starts in August. The Pansea deal comes on the heels of Orient-Express' May 25 announcement that it would acquire 50 per cent of the Napasai property in Koh Samui, which is not owned by Pansea.

In total, inclusive of Napasai, Orient-Express is buying 271 rooms for about $140,000 apiece.

The companies were scheduled to complete the transaction in 2009, but Orient-Express decided to move early.

Simon MC Sherwood, president, said he was confident the Pansea acquisition would be a launching pad for the company in Southeast Asia, allowing it to move forward much more rapidly than if it had waited until 2009.

Acquisition of Pansea from Hong Kong-based Hosia, will result in considerable tax savings for Hosia in connection with the Napasai transaction.

In 2004 Orient-Express Hotels provided a convertible loan to Hosia, expected to convert to approximately 25 per cent of Hosia' equity. At the same time it entered into a deal to be exercised in 2009, which will result in Orient-Express Hotels buying the remaining 75 per cent of Hosia's equity at eight times its 2008 earnings before income tax, depreciation and amortisation (EBITDA). Orient-Express said it believed that the $25-million purchase price was slightly less than 10 times the projected 2006 EBITDA.

Earnings from two Bali properties have been down due to the most recent bombing on the island and the Ubud Hanging Gardens property is still being developed, after an initial opening in July 2005.

Pansea owns six properties. In the ancient capital of Laos, Luang Prabang, it operates the La Residence Phou Vao. In Rangoon, it runs the Governor's Residence in the embassy district.

The Napasai property on Koh Samui opened in February 2004. It's enjoying rapid growth and has significant potential for residential development, the company said. In Siem Reap, Cambodia, it owns the boutique hotel La Residence d'Angkor, located near Angkor Wat and surrounding temples.

In Bali it operates the beachfront Jimbaran Puri and its Ubud Hanging Gardens hotel is located near Ubud Gorge. Ubud is the cultural centre of the island.

The six Pansea properties plus the Eastern & Oriental tourist train which operates between Singapore and Bangkok, and the Road to Mandalay cruise ship in Burma, give Orient-Express Hotels a strong presence in Southeast Asia and a platform from which to expand.

Orient-Express Hotels intends to retain the management team of Pansea both at the head office in Bangkok and at the six hotels. It also expects to use their skills to fuel its expansion in the region. In due course the company will be considering additional properties in Singapore, Hong Kong, Vietnam and China.