30th Jul 2015 17:00
LONDON (Alliance News) - InterContinental Hotels Group PLC late Thursday said it is not in talks with US hotel group Starwood Hotels & Resorts Worldwide Inc about a merger.
IHG said in a statement after the market close that it was responding to recent market speculation. "The board of directors of IHG states that it is not in talks with Starwood with a view to a combination of the businesses," the statement read.
The two companies have been the subject of frequent rumours in recent months, with IHG thought to be facing investor pressure to consider a tie-up. Jefferies, in an April note, said IHG, with its brand and geographic mix, would fill a strategic gap for Starwood.
Shares in IHG closed up 4.6% at 2,743.00 pence Thursday, spiking in late trade.
Both IHG and Starwood posted results on Thursday. Stamford, Connecticut-based Starwood reported second-quarter income from continuing operations of USD136 million compared to USD153 million, prior year.
IHG reported growth in profit in the first half of 2015, as it achieved growth in revenue per available room in all of the regions in which it operates and said it remains confident in the outlook for the rest of the year.
The FTSE 100-listed hotel operator, which owns brands including Holiday Inn, Crowne Plaza and InterContinental Hotels, reported a 21.5% rise in pretax profit in the six months ended June 30 to USD458 million from USD377 million, as total revenue grew 0.8% to USD915 million from USD908 million.
IHG said that it achieved growth in revenue per available room across all of its regions, comprising the Americas, Europe, Asia, the Middle East and Africa, and Greater China. All in all, global RevPAR was up 5.1% in the period.
In the Americas, RevPAR grew 5.4%, driven by rate growth of 4.2%, while a strong performance from the UK and Germany offset limited growth in France and a challenging trading environment in Russia to achieve a 5.1% rise in RevPAR in Europe.
In Asia, the Middle East and Africa, RevPAR was up 5.4%, driven by both growth in rate and in occupancy, while Greater China saw RevPAR growth of 1.5%, led by an improvement in occupancy, although it warned that trading remains challenging in Hong Kong and Macau.
Analysts at Numis said that IHG's first-half results were slightly ahead of expectations, but said it is concerned about China and the slowdown in the rate of RevPAR in Hong Kong and Macau.
IHG said it delivered 41,000 room signings, its best first half performance since 2008, and signed the highest number of Holiday Inn rooms ever in the period. It also added 28,000 rooms to the portfolio, increasing the total system size to 724,000, representing year-on-year net system size growth of 4.5%.
It added that its major owned-asset disposal programme, including the EUR330 million sale of InterContinental Paris - Le Grand in December and the agreement earlier this month to sell InterContinental Hong Kong for USD938 million, has thus far realised gross proceeds of USD8 billion.
Panmure Gordon analyst Anna Barnfather said that IHG's asset sales provide scope for USD1 billion cash to return to shareholders in 2016.
IHG will pay an interim dividend of 27.5 cents, a 10% increase on the 25.0 cents it paid in the first half of 2014.
"Looking forward, based on current trading trends, we remain confident in the outlook for the rest of the year," Chief Executive Richard Solomons said in a statement earlier Thursday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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