InterContinental CEO Says Merger Not Needed for GrowthNadja Brandt
InterContinental Hotels Group Plc Chief Executive Officer Richard Solomons said his company can grow on its own without a merger or takeover, and its $10 billion market capitalization has returned “a ton” of value to shareholders.
“We have a huge organic pipeline,” Solomons said in an interview at Bloomberg’s New York offices. “What’s nice about this position is, there is no necessity to do deals. Today, we’ve got some big companies and the new supply is predominantly from those few big players. We’ve all got great opportunities. We compete with each other but there is no necessity for deals to happen.”
Solomons declined to comment on speculation of a takeover offer for Denham, England-based InterContinental. Sky News reported on May 24 that the owner of the Holiday Inn and Crowne Plaza brands received a bid that valued it at 6 billion pounds ($10.1 billion). The hotel operator rejected the offer, from a U.S. company, as too low, according to Sky News, which didn’t say where it got the information or identify the suitor.
Last week, Marcato Capital Management LP, a San Francisco-based hedge fund with a 3.8 percent stake in InterContinental, called on the company to seek a merger, the Wall Street Journal reported.
InterContinental is looking to expand its presence in the mid-priced hotel segment in the U.S. as well as in places such as China, Russia and India, and to increase awareness of the InterContinental name, Solomons said. Earlier this month, the company reported revenue that beat analysts’ expectations as it benefited from growing demand for lodging in the Americas, which account for about half of the company’s sales.
“We grow the business and continue to grow it through brand expansion and by introducing our brands to new markets,” Solomons said. “We’ve done deals. We’ve launched brands. Ultimately, IHG has created a ton of value and returned a ton of shareholder value.”