Six Continents to invest $1b in InterContinental
Six Continents PLC is to invest $1b (£644m) in its 140 InterContinental hotels worldwide over the next five years, using some of the money it had promised to deliver back to shareholders by the end of this year. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /?>
The move will place the five-star brand in pole position once markets recover and enable new builds and refurbishments to take place, said chief executive Tim Clarke.
Six Continents is known to have been looking for ways to invest the cash it acquired following the £2.3b sale of its brewing and unbranded pub assets in August 2000. At its interim results earlier this year Six Continents said it would buy back up to £1b in shares if it had not found a suitable investment by December.
However, the company has continued to play down reports that its shareholders want it to demerge its hotel and pub divisions to allow a more focused approach to each area.
"We are considering the options and demerger is one of them," said a spokesperson.
Commenting on rumours that Six Continents chairman Sir Ian Prosser is to postpone retirement to head up a demerged hotel company the spokesperson added: "His contract is up for renewal next July."
The group will issue a trading statement next week, in which many expect an announcement of the split.
The Grand InterContinental in Paris is currently closed for refurbishment and will reopen in May 2003. The May Fair InterContinental in London will close next January for a 19-month refurbishment programme.
New builds over the next five years are planned for Boston, Seattle, and Warsaw. There are also operational changes planned to the hotels such as 24-hour health clubs and business centres, complimentary massages and jetlag recovery kits.
Area president Europe John Bamsey said that Milan and Munich topped the wish list for an InterContinental outlet closer to home. Expansion would be through a mixture of managed and owned but not franchised properties, he added.
