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IHG denies merger talks with Starwood

31 July 2015 by
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.

Shareholders see benefit of IHG's strong half-year results >>

Sale of Starwood Hotels & Resorts to be explored >>

IHG reports 6% profit increase as shareholder pushes for merger >>

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