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U.S. billionaire financier Carl Icahn (AP file photo)

Fairmont Hotels & Resorts Inc. has formally turned down a bid by U.S billionaire financier Carl Icahn to buy majority control of the company.

Fairmont said Icahn's $40 US per share bid for 41 per cent of the hotel chain was too low and "not in the best interest of Fairmont or its shareholders."

The hotel chain's board of directors called on shareholders to reject Icahn's offer.

In early November, Icahn announced he had paid $185 million US to acquire a 9.3 per cent of Fairmont's stock, saying he wanted the Canadian-based luxury hotel chain to take steps to boost the company's "undervalued" share price.

Fairmont (TSX:FHR) owns or operates more than 80 properties around the world, including the Chateau Laurier in Ottawa, the Queen Elizabeth in Montreal, the Newfoundland in St. John's, the Royal York in Toronto, Chateau Lake Louise and the Banff Springs Hotel in Alberta, the Hotel Vancouver and Victoria's Empress.

Fairmont also owns Delta hotels in Canada.

Shares of Fairmont rose $1.14 to $47.78 on the TSX.