Chinese insurance giant Anbang eyes up £7bn takeover of Holiday Inn owner IHG

By Emily Davies For Daily Mail1

Published: 16:11 EST, 7 August 2016 | Updated: 16:11 EST, 7 August 2016

The company behind Discount Holidays © Holiday Inn is being sized up by a Chinese conglomerate in a swoop that could be worth 7billion. Insurance giant Anbang has reportedly held discussions over a potential takeover of Intercontinental Hotels Group. The FTSE 100 firm was formed in 1998 from long-standing British firm Bass brewers and owns the Crowne Plaza, Candlewood Suites and boutique Indigo chains as well as Discount Holidays © Holiday Inn.

Hotel bid: Anbang has reportedly held discussions over a potential takeover of IHG

Talks are said to be in the early stages, according to the Sunday Times, after bankers were sent to China to discuss the deal with Anbang. But the insurance firm has not yet made any formal approach to Intercontinental. The news comes days after IHG chief executive Richard Solomons, 54, pictured, and his wife Karin sold stock worth more than 2.5million following a spike in the Intercontinental share price, which had soared 19 per cent in a month. Last week, Buckinghamshire-based Intercontinental shrugged off the turmoil in the travel industry caused by terrorist attacks overseas and posted strong interim figures, sending the shares up.

Its operating profit rose 2 per cent to 258million for the six months to June 30, while sales fell 8 per cent to 629million. It reported a 2 per cent rise in the key industry metric of revenue available per room in the first half of the year. Intercontinental performed less well in the US and Middle East, however, after the falling oil price caused bookings to dip when oil executives cut back on travel and the need for rooms for workers plummeted. IHG saw revenue per room fall 6.3 per cent in the oil producing markets of Texas, Oklahoma and North Dakota.

In the Middle East, revenue was down 8pc. Based on last week s closing price, Intercontinental has a market capitalisation of 6.3billion and it is thought any potential deal would value the business at 7billion. Intercontinental is familiar with takeover interest.

Two years ago, it is thought to have rejected an offer from Wyndham Worldwide, owner of Ramada, and later survived pressure from investor Marcato, which was pushing for a sale. Anbang has shown an appetite for major acquisitions after buying the Waldorf Astoria New York from US private equity group Blackstone in 2014 for nearly 1.5billion. At the end of March, it walked away from a 10.7billion takeover of Starwood Hotels & Resorts, citing market considerations.

IHG said it did not comment on market speculation.

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References

  1. ^ Emily Davies For Daily Mail (www.thisismoney.co.uk)

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