IHG spurns acquisition bid, but talk of possible sale not finished

It'll cost more than $10.1 billion to own the InterContinental Hotels Group. We know that because over the weekend, an unnamed suitor approached the UK-based chain, owner of such brands as Crowne Plaza and Holiday Inn, with an offer of that amount to take over the company.

The news was reported by UK's Sky News, and already there is speculation about who it may have been, with names such as Starwood Hotels & Resorts Worldwide and Starwood Capital Group (no relation) being tossed out.

The multibillion-dollar bid was said to be rejected three weeks ago and the company has picked up its stock repurchasing effort since the bid, suggesting it is not in an active dialogue with the suitor(s).

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Sky also cited its sources as saying that IHG is readying itself for another bidder or a rival to return, though insiders also suggested that the recent approach could simply fade away.

Beyond IHG's breadth, tax implications are one of the biggest benefits a U.S.-based company would receive if it owned IHG. From CNN: "The acquisition of a hotel chain in the UK would be lucrative for a U.S. hotel operator because it would enable that company to establish a tax home base across the pond, allowing it to avoid paying taxes on international cash holdings."

The news of the acquisition bid did send IHG's stock on a surge Tuesday, jumping 5.5 percent on the FTSE.

The recent bid news will only stay in the news cycle until IHG makes a strong statement one way or the other. Until then, it appears the 4,700-hotel chain is still listening to offers. IHG may have snubbed the first bid only because it was too low.

IHG has been in the selling mood as of late. In December, it sold an 80-percent stake in the InterContinental New York Barclay in Manhattan. Then, in March, it sold off the InterContinental Mark Hopkins in San Francisco.

Mergers and acquisitions have been in the news. Just last week, Toronto-based Brookfield Asset Management, reportedly Canada’s biggest manager of alternative assets, bought Thayer Lodging Group, a private-equity group highly invested in hotels, including the Ritz-Carlton in San Francisco.

 

 

 

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