InterContinental Jumps After Report Company Rejected Offer
Published on May 28 2014 2:16 PM in Hotel
InterContinental Hotels Group climbed to a record in London trading after Sky News reported that the company spurned a takeover bid that valued it at about £6 billion ($10.1 billion).
InterContinental, the world’s largest provider of hotel accommodation, was up 3.4% to 2,302 pence at the close of trading, the highest since the company was formed in 2003. That gave the company a market value of £5.9 billion.
“We consider the report to be credible and think the news will support IHG’s stock price in the coming weeks,” analysts at Exane BNP Paribas wrote in a research note yesterday. “This might launch a new M&A wave in the sector.”
Hotel companies are seeking to better compete against online travel companies. The battle against travel websites will “likely trigger a race for critical size in the atomized hotel sector,” Exane BNP Paribas said in its note. Other potential takeover targets include Accor SA, NH Hoteles SA and Rezidor Hotel Group AB, the firm said.
InterContinental, the owner of the Holiday Inn and Crowne Plaza brands, declined to comment on Sky’s May 24 report. Sky said InterContinental rejected an offer from a US company “a few weeks ago” because it was too low. Sky didn’t say where it got the information.
InterContinental is the best performer on the FTSE 100 index in the past three months after it announced a plan on May 2 to pay a special dividend in July. The Denham, England-based company climbed 18.8% during that period, while the U.K. benchmark index was little changed.
The hotel company earlier this month reported higher-than-expected first-quarter revenue as it benefited from growing demand for accommodation in the Americas, which account for about half of the company’s sales.
Accor agreed to buy hotels in Germany, the Netherlands and Switzerland for about €900 million, according to a statement today. The Paris-based company is the biggest operator of European hotel rooms, while InterContinental is the largest Europe-based hotel company.