28th Feb 2005 07:03
InterContinental Hotels Group PLC28 February 2005 28 February 2005 INTERCONTINENTAL HOTELS GROUP ANNOUNCES DISPOSAL OF MAJORITY INTERESTS IN TWO INTERCONTINENTAL HOTELS IN UNITED STATES InterContinental Hotels Group PLC ("IHG") today announces it has agreed theacquisition by Strategic Hotel Capital, Inc. ("SHC") of 85% interests in twohotels in the United States. IHG will receive approximately $287m in cash(before transaction costs) based upon a total value for both hotels ofUS$303.5m, $12m in excess of net book value. The two hotels, the InterContinental Chicago (807 rooms) and theInterContinental Miami (641 rooms), will continue to be managed by IHG under new20 year management contracts. IHG has three consecutive options of ten yearseach to renew the management contracts, giving a total potential contract lengthof 50 years. The transaction is expected to complete in the first half of 2005, with IHGretaining a 15% ownership interest in two partnerships that hold the two hotels. Richard Solomons, finance director of IHG, commented: "By retaining high quality management contracts, this deal ensures long termrepresentation of the InterContinental brand on these landmark properties andreinforces our position as a manager of top quality international hotels. Thisalso enables us to free up capital from our real estate in a value-creative way,and to extend our good relationship with Strategic Hotel Capital." Further transaction details 1. The management contracts signed in respect of the InterContinental Miami andthe InterContinental Chicago will generate ongoing management fees for IHG,consisting of a base fee calculated as a rising percentage of revenues and anincentive fee based on hotel cashflow, and additionally a partnership returnfrom its 15% retained interest. 2. The tax potentially payable on these transactions has already been largelyprovided for. The 2005 tax charge to the profit and loss arising from thetransaction should not exceed $13m and the cash tax payable in 2005 should notexceed $6m. 3. The partnerships will be approximately 65% debt financed. IHG's interests inthe partnerships have a book value of $16m. Since Separation in April 2003, IHG has disposed of or agreed to dispose of 47hotels (including those in today's announcement) with proceeds of approximately£730m. 90 properties remain on the market with a net book value of £1.5 bn. Transactions announced today: 85% interests in two hotels, 1,448 rooms, based ontotal value for the two hotels of $303.5m. Financial results for the two hotels (100% interest) 2004e 2003 $m $mRevenue 93 89EBITDA 27 25EBIT 15 12Hotel RoomsIC Chicago 807IC Miami 641 Hotels disposed of or agreed to be disposed of since separation: Hotel Location RoomsIC Austin US 189IC Central Park South US 208IC Chicago US 807IC Houston US 485IC Miami US 641IC San Juan Puerto Rico 402IC Toronto Canada 210IC Mayfair UK 289CP Hilton Head US 340CP Los Angeles Airport US 613CP Redondo Beach US 346CP White Plains US 401CP Midland Manchester UK 303CP Vanuatu Vanuatu 140HI Anaheim US 264HI Atlanta Airport US 190HI Memphis US 243HI South Bend US 229HI Gatwick Crawley UK 217HI Middlesbrough/Teeside UK 134HI Preston UK 129HI Plymouth UK 112HI Sheffield West UK 138HI Swansea UK 106 Location RoomsHI Adelaide Australia 193HI Darwin Australia 183HI Newcastle Australia 72SBS Alpharetta US 118SBS Anaheim US 143SBS Atlanta Perimeter US 143SBS Auburn Hills US 118SBS Austin US 121SBS Boston US 133SBS Burlington US 141SBS Carmel Mountain US 116SBS Charlotte US 117SBS Columbia US 118SBS Denver US 115SBS Eatontown US 131SBS Fort Lauderdale US 141SBS Houston Galleria US 93SBS Myrtle Beach US 119SBS Portland US 117SBS San Antonio US 118SBS Sorrento US 131SBS Toronto Markham Canada 120Posthouse Epping UK 79Total 47 10,016 For further information, please contact:Investor Relations (Gavin Flynn, Paul Edgecliffe-Johnson): +44 (0) 1753 410 176 +44 (0) 7808 098 972Media Enquiries (Leslie McGibbon): +44 (0) 1753 410 425 +44 (0) 7808 094 471 Notes to Editors InterContinental Hotels Group PLC of the United Kingdom (LON:IHG, NYSE:IHG(ADRs)) is the world's largest hotel company by number of rooms.InterContinental Hotels Group franchises, manages, leases or owns, throughvarious subsidiaries, more than 3,500 hotels and 536,000 guest rooms in nearly100 countries and territories around the world. The Group owns a portfolio ofwell recognised and respected hotel brands including InterContinental(R) Hotels& Resorts, Crowne Plaza(R) Hotels & Resorts, Holiday Inn(R) Hotels and Resorts,Holiday Inn Express(R), Staybridge Suites(R), Candlewood Suites(R) and HotelIndigoTM, and also manages the world's largest hotel loyalty program, PriorityClub(R) Rewards, with more than 23 million members worldwide. In addition tothis, InterContinental Hotels Group has a controlling interest in Britvic, thesecond largest soft drinks manufacturer in the UK. For the latest news from InterContinental Hotels Group, visit our online PressOffice at www.ihgplc.com/media This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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