InterContinental Hotels Jumps on Report of Starwood Talks
InterContinental Hotels Group, which operates the former Four Seasons hotel in Dublin, jumped in London trading on Thursday after the Financial Times reported the company has held early-stage merger talks with Starwood Hotels & Resorts Worldwide.
A merger would create a the world's largest hotel operator, with more than one million rooms in 100 countries. The talks are tentative and Starwood may chose a different partner or follow another strategy, the FT reported, citing two people familiar with the discussions.
InterContinental, Europe’s second-largest publicly traded hotel company, gained as much 5.5 per cent and was up 3.7 per cent at 2,719 pence at 4.17 pm in London on Thursday.
"We never comment on speculation, and if somebody makes an offer, we’re a British company, and we’d consider it," InterContinental Chief Executive Officer Richard Solomons said in an interview on Bloomberg Television on Thursday. Solomons made the comments following the company’s first-half earnings release, before the Financial Times published its article.
Starwood spokeswoman Carrie Bloom and InterContinental spokeswoman Zoe Bird declined to comment on the article.
Buying InterContinental, owner of the Holiday Inn and Crowne Plaza brands, would expand Starwood’s offering of midscale hotels and more than double its hotel rooms in the fast-growing Chinese market. InterContinental operates 722,600 rooms, including 79,000 in China. Starwood, whose brands include the Sheraton and W, has 358,400 rooms.
Starwood in April said it was exploring strategic and financial alternatives to increase shareholder value. That fueled speculation that it may bid for InterContinental, which has been considered an acquisition target for more than a year.
Both Starwood and InterContinental have been moving to cut real estate holdings to focus on property management and franchising. In November, Starwood sold its Sheraton on the Park in Sydney to China’s Sunshine Insurance Group.
Shareholder Marcato Capital Management LP, criticising InterContinental’s management, last year called for a merger which it said could double the company’s valuation.
News by Bloomberg, edited by Hospitality Ireland