Activist Investors Push for InterContinental Hotels Merger to Boost Share Price
Activist investor Marcato Capital Management LP said InterContinental Hotels Group Plc’s share price may double if the lodging operator agrees to a merger or acquisition by another hospitality company.
The hedge fund, owner of about 4 percent of InterContinental shares, hired investment bank Houlihan Lokey in August to help it conduct a strategic review of Europe’s second- largest publicly traded hotel operator. A combination would enhance InterContinental’s value by increasing opportunities for growth and generating “substantial business and financial synergies,” Marcato said today in a letter to investors.
InterContinental “will not be able to provide shareholder value comparable to what could be achieved through a combination with another major hotel operator,” Marcato said.
Richard Solomons, the hotel company’s chief executive officer, said in a June interview that InterContinental can grow without a merger or takeover and it has served investors well. The Denham, England-based hotel company is seeking to expand in the mid-priced category 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.