InterContinental Hotels Group (LON:IHG) has inked a deal to buy a majority stake in Regent Hotels and Resorts, the blue-chip group has said. The move is expected to accelerate the Holiday Inn and Crowne Plaza’s growth in the luxury segment.
InterContinental’s share price lost ground in the previous session, shedding 0.57 percent to close at 4,560.00p. The stock, however, outperformed the broader UK market, with the benchmark FTSE 100 index ending the session 1.05 percent in the red at 7,138.78 points. The group’s shares have added nearly 18 percent to their value over the past year, as compared with about a three-percent drop in the Footsie.
IHG snaps stake in Regent Hotels & Resorts
InterContinental announced in a statement this morning that it had agreed to buy a 51-percent stake in Regent Hotels and Resorts for $39 million in cash. The FTSE 100 group will also have the right to acquire the remaining 49-percent interest in a phased manner from 2026.
“IHG is already one of the world leaders in luxury with our InterContinental Hotels and Resorts brand, but we see significant potential to further develop our global footprint in the fast-growing luxury segment,” the group’s chief executive Keith Barr commented in the statement, adding that the company saw “a real opportunity to unlock Regent’s enormous potential and accelerate its growth globally”.
Analysts on InterContinental Hotels Group
Credit Suisse reiterated its ‘outperform’ rating on InterContinental yesterday, with a price target of 5,500p on the shares. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 4,460.83p.
The Holiday Inn owner updated investors on its full-year performance last month, delivering a rise in revenues and profits for 2017. InterContinental, however, cautioned that it was not planning additional capital return for the current year amid new initiatives to drive growth.