News Column

IHG shareholder pushes for tax inversion bid

August 5, 2014


INTERCONTINENTAL Hotels Group (IHG) could become the latest target of a tax inversion deal after activist investor Marcato Capital confirmed yesterday is has hired investment bankers to explore options for the group.

The San Francisco-based fund, which owns a 3.8 per cent stake in IHG, said it has retained Houlihan Lokey "to conduct a full strategic review for enhancing shareholder value" at the hotelier. Marcato emerged as a major shareholder in IHG in May after reports that the Holiday Inn and Crowne Plaza owner had rebuffed a 6bn bid from a US suitor. At the time, Marcato publicly urged IHG to consider a deal.

It is now thought to be looking to attract interest from US companies that could take advantage of IHG's lower UK corporation tax rate through a so-called tax inversion deal.

"The review will focus on various alternatives including, but not limited to, improving capital structure and/or capital allocation and strategic transac-tions", the firm said in a statement.

The US Treasury is trying to crackdown on controversial tax inversions after a string of M&A deals that have allowed US firms move their tax base to Europe. Abbvie's recent 32bn takeover of Uk-based Shire is the biggest to date.

"Marcato believes current, favorable market conditions presently exist to significantly enhance IHG shareholder value, which may not be available in the future," the hedge fund added.

IHG, which publishes its half-yearresults today, declined to comment.

InterContinental Hotels Group PLC p 2,475 2,365.00 4 Aug 2,450 2,425 2,400 2,375 1 Aug 4Aug 29Jul 30Jul 31 Jul

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Source: City A.M. (UK)

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