InterContinental Hotels Group (IHG) today announced the sale of 73 hotels to LRG, a consortium headed by Lehman Brothers Real Estate, for £1b.
The hotel group, which put the hotels up for sale in September, confirmed the deal as it announced financial results for the year ending 31 December 2004.
Purchasing consortium LRG also includes GIC Real Estate and Realstar Asset Management.
The sale, predicted by Caterer two weeks ago, includes management contracts at the 73 hotels.
InterContinental will manage 63 hotels for 20 years under its own brand and will receive a cash injection of £21m from the consortium.
The remaining 10 hotels will also be managed by IHG, but LRG will have to agree to further investment in the properties if it wants to maintain the brand after 2007.
The £1b deal for 12,841 rooms includes four Crowne Plaza hotels, 68 Holiday Inn hotels, and one Express by Holiday Inn.
Richard Solomons, finance director at IHG, said: "These long-term contracts give us excellent continued representation for Holiday Inn in the UK, one of our most important markets globally."
IHG will return a further £1b to its shareholders as a result of the sale, which has to be cleared by the EU's merger committee.
The group, which also includes the soft drinks manufacturer Britvic, announced that its turnover for the year was up to £2.2b, from £2.16b in 2003.
Its hotel division saw its sales increase to £1.5b, with operating profit up by 25.5% from £200m in 2003 to £251m last year.
Overall pre-tax profits were up by 26.6% at £309m.
David Webster, chairman of IHG, said: "These results show strong trading for last year and the outlook for 2005 is positive."
By James Garner
Buy this week's Caterer magazine for more industry news and analysis