The partial takeover bid would be attempted by Icahn Partners LP and Icahn Partners Master Fund LP, which together already own about 9.3% of Fairmont's common shares, according to Fairmont. Icahn said Friday the companies plan to launch a $1.18-billion cash offer to obtain a controlling 51% in the luxury hotel chain, which equates to 29.6 million shares at $40 per share. Fairmont shares were up $2.09 or 5.39% in midday trading Friday to $40.88. About 3.62 million shares have traded hands, which is more than five times the stock's average daily volume.

If and when an actual takeover bid is commenced, Fatt says Fairmont's board of directors will promptly make a formal recommendation to shareholders. "A tender offer for shares that, were it successful, would give Mr. Icahn control of 51% of [Fairmont] without paying a takeover premium to all shareholders would be unacceptable," says Fatt.

Fairmont's managed portfolio consists of 88 luxury and first-class properties with approximately 33,000 guestrooms in the US, Canada, Mexico, Bermuda, Barbados, United Kingdom, Monaco, Kenya and the United Arab Emirates. In addition to hotel management, Fairmont holds real estate interests in 27 properties and an approximate 24% investment interest in Legacy Hotels Real Estate Investment Trust, which owns 24 properties.