News Column

Hotels owner holds merger effort at bay

August 6, 2014

By Hugo Duncan, Daily Mail, London



Aug. 06--Intercontinental Hotels came out fighting yesterday with a 9pc hike in its dividend as it countered pressure from an activist investor to merge with a rival.

The company, the world's biggest hotelier with 693,000 rooms in 4,732 hotels under brands such as Crowne Plaza and Holiday Inn, said underlying profits rose 6pc to pounds sterling 178.4m in the first six months of the year.

Revenues per available room a key measure of success in the industry were up 5.8pc with the US, its biggest market, up 6.6pc and the UK up 8.7pc.

That helped to offset problems in countries such as Russia, Israel and Thailand.

The company raised its interim dividend by 9pc to 25 cents a share, or 14.8p, as it hailed 'a strong first half performance'.

But the stock, which hit a record high of 2494p last month, fell more than 3pc or 77p to 2288p.

The results came a day after it emerged that activist investor Marcato Capital has hired advisors as it seeks to push InterContinental into a deal.

The move by the San Francisco hedge fund followed speculation that the hotel operator had rejected a pounds sterling 6bn takeover bid.

InterContinental chief executive Richard Solomons said: 'Our counter-argument is the growth you've seen in our profits. I think we've created a lot of value.'

Pre-tax profits fell 18.4pc to pounds sterling 223.5m in the first six months of the year as one-off factors that boosted the same period last year took their toll on the figures.

InterContinental has a pipeline of 187,000 rooms in 1,175 hotels due to open in the coming years after its best six months of 'signings' agreements to open new sites since 2008.

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(c)2014 Daily Mail (London, )

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Source: Daily Mail (London, England)


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