IHG denies merger talks with Starwood
InterContinental Hotels Group (IHG) has been forced to deny rumours that it is talking to rival group, Starwood Hotels & Resorts, about a possible merger.
Speculation about the creation of what would be the world's largest hotel company swirled around the publication yesterday of half-year results for both companies.
A statement by IHG, operator of the InterContinental, Crowne Plaza, Holiday Inn and Hotel Indigo brands, said: "Following recent market speculation, the board of directors of IHG states that it is not in talks with Starwood with a view to a combination of the businesses."
There have been rumours within the industry for more than a year that IHG may consider a merger with another global hotel group after a minor shareholder in the company appointed financial advisors to undertake a full strategic review of the group.
Marcato Capital Management (MCM), a San Francisco-based investment company that has a stake of around 4% in IHG, had previously urged the company, which has a portfolio of 4,900 hotels, to pursue a merger with another major operator.
Starwood's portfolio comprises more than 1,200 hotels.
IHG performance during the first six months of the year was strong, with revenue and operating profit up 1% to $915 (£586m) and 10% to $337 (£215m) respectively. However, Starwood reported a 18% fall in net revenue to $235m (£150m), with EBITDA down 3.3%% to $585m (£375m). The fall in income was partly due to the impact during the past year of the sale of nine hotels by Starwood.
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