United Kingdom
United States
Asia Pacific
Activist investor: IHG could double share price with merger
InterContinental Hotels Group has been urged to seek a merger partner after major shareholder Marcato Capital Management went public with its concerns that IHG are missing a golden opportunity to enhance long-term shareholder value.
The San Francisco-based hedge fund owns 4% of IHG’s outstanding shares and has recommended the board consider opportunities in mergers and acquisitions.
Marcato said IHG ‘dismissed suggestions’ to look at potential options, following reports of a $10 billion offer that was ‘quickly rebuffed.’
In an open letter to fellow shareholders, Marcato said it was "concerned that the board was not giving due consideration to the strategic alternatives available in the current industry."
"After a comprehensive strategic review of the business, IHG will not be able to provide shareholder value comparable to what could be achieved through a combination with another major hotel operator," it said.
Marcato concluded a merger could produce a 100% premium above the current share price.
"This is a unique and ideal time for IHG to consider strategic alternatives — the hospitality industry and M&A environment are both strong, interest rates are at record lows, and we believe there is likely to be interest from several potential strategic partners."
In response to Marcato’s actions, IHG released a statement saying: "IHG met Marcato on September 22, 2014, and October 29, 2014, and reviewed its analysis. Following this review, the board has concluded that it remains in the best interests of all its shareholders to continue to pursue its current strategy for high-quality growth and delivering strong operational and financial performance."
Related News Stories:
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
Kittipong Prapattong’s Plan for Thailand’s Tourism Growth: Taxes, Visas, and Campaigns
James Jin: Didatravel’s Journey from China to Global Reach and the Impact of AI on Travel
Darien Schaefer on Pensacola’s Evolution: From Small Town to Global Destination
Florida Tourism’s Next Frontier: Dana Young on Expanding Beyond the Classics
Patrick Harrison on Tampa Bay Tourism’s Resilience and Marketing Strategy
Bubba O’Keefe on Clarksdale’s Vibrant Music Scene
Commemorating Elvis and Embracing Tupelo’s Culture with Jennie Bradford Curlee
Craig Ray and the Expansion of the Blues Trail
Presenting Mississippi’s Cultural Trails with Katie Coats
Robert Terrell: A Journey Through BB King’s Influence
Rochelle Hicks: Celebrating Mississippi’s Musical Legacy
Exploring Jacksonville with Katie Mitura: The Flip Side of Florida
Dozens fall ill in P&O Cruises ship outbreak
Turkish Airlines flight in emergency landing after pilot dies
Boy falls to death on cruise ship
Unexpected wave rocks cruise ship
Storm Lilian travel chaos as bank holiday flights cancelled