InterContinental Hotels Group (LON:IHG) has completed the acquisition of a 51-percent stake in Regent Hotels & Resorts, the Holiday Inn and Crowne Plaza owner has said. The FTSE 100 group inked the deal earlier this year is it looks to accelerate its growth in the luxury segment.
InterContinetal’s share price has fallen into the red in today’s session, having given up 0.76 percent to 4,684.00p as of 14:32 BST. The stock is marginally outperforming the broader UK market selloff with the benchmark FTSE 100 index currently standing 0.91 percent in the red at 7,567.81 points. The group’s shares have added just under 10 percent to their value over the past year, as compared with about a 3.5-percent gain in the Footsie.
InterContinental wraps up acquisition
InterContinental announced in a statement today that it had completed the acquisition of a 51-percent stake in Regent Hotels & Resorts which it snapped up for $39 million in cash, payable in three tranches of $13 million. The FTSE 100 group paid $13 million upon completion of the deal, with the second amount due in 2021 and the third in 2024. The Holiday Inn owner has the right to acquire the remaining 49-percent interest in a phased manner from 2026.
InterContinental, which announced the deal in March, reiterated in today’s statement that it was planning to bring Regent into its brand portfolio at the top end of the luxury segment and accelerate its growth globally.
Analysts on Holiday Inn owner
Numis Securities reaffirmed InterContinental as a ‘hold’ last month, valuing the shares at 4,850p, while JPMorgan Chase & Co hiked its rating on the stock from ‘underweight’ to ‘neutral,’ and its price target from 3,680p to 4,350p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘hold’ rating and an average price target of 4,534.62p.
InterContinental is scheduled to update investors on its interim performance on August 7.