Starwood for sale, tipped to buy IHG: speculation rife
InterContinental Hotels Group shares soared to record highs amid speculation it will be bought by Starwood after the group announced it is in the beginning stage of a strategic and financial review.
Starwood’s Board of Directors announced this week it has determined to “explore a full range of strategic and financial alternatives to increase shareholder value”, and retained banker Lazard Ltd to assist in the process.
“No option is off the table, and we will take the time we need to thoroughly evaluate our opportunities and achieve the best result for our shareholders, business partners, and associates,” chairman, Bruce Dunanc said.
Starwood said it “does not intend to make any further public comment regarding the review until it has been completed”, but shares jumped to a 6-year high after the announcement.
“The mostly likely scenario is to put up the company for sale”, Stifel Nicolaus analyst Simon Yarmak told Reuters.
MLV & Co. analyst Ryan Meliker was also quoted by Bloomberg adding: “By saying no option is off the table, Starwood is indicating a potential sale of the company is possible. We believe the company could be worth well above US$100 per share to a strategic or leveraged buyer”.
However, following the announcement, InterContinental Hotels Group (IHG) London trading rose to record high since being on the market in 2003, fuelling speculation the two companies would combine and Starwood would buy IHG.
Last November, IHG was urged to merge with another “major hotel group” by Marcato Capital Management.
“The logic for a tie-up between IHG and Starwood is quite clear … It would be a neat fit in terms of brand profile and geographic coverage,” Numis Securities, with a hold rating on InterContinental, analyst Wyn Ellis told Bloomberg.
“Buying InterContinental would help Starwood gain better access to China, where InterContinental has more than 240 hotels.”
On the flipside, FBR Capital Markets & Co analyst Nikhil Bhalla said on Bloomberg TV that the likelihood for a major hotel group, including IHG or Marriott, to buy Starwood would be slim and out of line with current strategies to manage, not own, properties.
“To buy Starwood you’ll be stuck with a big chunk of hotels that they own, and you’re going to have to figure out what to do with that,” he said.
“The highest probability is that the company markets itself to a long-term ‘sticky’ buyer like a sovereign wealth fund out of a Middle Eastern country or potentially one or group of investors in emerging markets,” Bhalla said.
According to Bhalla, the company fell apart “long before” former ceo Fritz Van Paasschen resigned in February, and that the Starwood strategy “failed because there was too much focus on international growth”, and “because it didn’t have good brands in the fastest growing area of our industry, which is the upscale segment or the mid-tier economy segment” where competitor brands have been growing.
There are only that many large scale Sheraton or Westin hotels to put in the city centre … they did not have a very good platform in that segment. You need to have smaller brands to fill the edges.” Bhalla said on Bloomberg.
Starwood reportedly had a market valuation of about US$14 billion the day before the announcement.
Earlier this month, Starwood said it will launch a new collection of independent hotel brands under Tribute Portfolio, the first new brand for the group in nine years.
Travel Weekly contacted both Starwood and IHG for comment, but did not receive reply at the time of publication.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
hotel ihg intercontinental hotels group starwoodLatest News
Seabourn’s two new value-add offers for 2024-25
Luxe cruise line Seabourn is offering two value-added promotions featuring must-have fares and a generous shipboard credit for guests seeking to book their next voyage. The exclusive “A Sail to Remember” Event includes must-have fares on most Seabourn ultra-luxury ocean and expedition voyages in October 2024 and beyond. The “More Moments on Us” Event offers […]
PONANT commercial team expands to meet growing demand in APAC
Luxury exploration cruise line Ponant has announced significant updates to their Asia Pacific commercial team in response to accelerated growth across the region. “These structural enhancements signify Ponant’s dedication to meeting the evolving needs of our valued trade partners in the Asia Pacific region,” general manager sales & marketing, Asia Pacific, Deb Corbett said. “We […]
Gen Z and millennials on track for rise in Europe rail trips, says TruTravels
Despite what you think, Gen Z and Millennials are not 'off the rails', but instead want a fast track to Europe.
$230m joint Novotel & ibis Styles Melbourne Airport hotel prepares to open
Dear all business travellers, you're Melbourne experience just got a whole lot better.
Envoyage premieres Worldwide 2024 in Santiago
There has been a warm reception for 300 attendees at Envoyage's gabfest in Santiago, Chile.
Disney Destinations launches epic Aussie agent incentive
Everyone needs a bit of Disney in their life (apparently) and agents can get their next dose for free here.
IPW 2024: 960,000 Aussies took the trek to the Land of the Free last year
Nearly 6,000 travel industry reps descend on LA. Thankfully for all of their bosses, it's not in Vegas.
Nauru Airlines offers new direct flights from Brisbane to Palau on ‘Paradise Express’
No more island hopping to Palau as Nauru Airlines hits this boundary six.
Etihad Airways boosts connectivity with five interline partnerships
Etihad high fives itself with interline partnerships announcing a handful of new airlines, including Rex.
Discover the enchantment of India – A tale of timeless cities
Whether you're game enough to test out the street food or not, we recon India should be top of your list.
Qantas cops $100m penalty with passengers to get $20m back over cancelled flights
Qantas cops a $100m civil penalty, passengers to get back $20m over cancelled flights to resolve ACCC court battle.
Body found off Sydney Heads suspected to be missing cruiser
Tragic developments onboard Pacific Adventure this morning.
Wendy Wu Tours ‘Wonderlust Sale’ offers the wonders of the world for less
More for less... Great news for all apart from Wendy's wallet.
Booking.com launches AI Trip Planner in Australia and New Zealand
Booking.com launches new AI feature in Aus. We're hoping AI never gets the nuance involved with writing these jokes.
Voyages celebrates 40 years at Uluru with two new immersive experiences
No plans for celebrating your 40th this year? Here's a hot tip from us.
SkyDeck: The inflight entertainment you could never have imagined
Forget those external cameras you can live stream while in the air... With SkyDeck you can check it out for yourself.
Second Boeing whistleblower dies of ‘mystery infection’
Joshua Dean died from a fast-growing mystery infection on Tuesday.
Aussie winners of American Airlines ‘Sell Your Way to the USA’ announced
Show me the money! For the winners, Sell Your Way to the USA was worth getting involved in.
ANZCRO celebrates 30th with special edition of iconic New Zealand Book
Choice bro! ANZCRO celebrates its 30th with a special edition of its iconic New Zealand Book. Chur!
Room to move at Cairns Harbourside Hotel with ‘spacious’ new family package
Moody teens can eat two-minute noodles while younger brothers and sisters get to eat free with mum and dad. Win, win!
A&K unveils lavish around the world wildlife adventure in private jet
The kind of holiday that if you need to ask the cost, you probably can't afford it.
Flight Centre and Reforest hit one million trees target early
Nice one Flight Centre, we think you've earned an early Friday knockoff.
New cruise options spearhead stacked APT 2025 program
Just in case you thought you were running out of cruise itineraries, APT's here with a fresh batch.
Travel Weekly announces a new team to helm Australia’s No.1 travel trade title
Some shameless self-promotion from us, but we thought you needed to know who's bringing you the news.
IHG reveals plans for Brisbane’s first Kimpton in 2028
Just another reason to book that trip to Brisvegas. But don't jump the gun, it's not open until 2028.
Cruiseabout’s first store in five years opens in Perth
Perth gets a break from being behind the rest of the country with the addition of the first Cruiseabout store.
ATAS complaints process acknowledges non-economic loss
A High Court case win over 'disappointment and distress' on a cruise gone wrong prompts ATIA complaints change.
Cunard previews new Queen Anne
Yep, this one does exactly what it says on the tin.
Bunnik Tours unveils latest expansion to Iceland
Just as the Icelandic vikings did many years ago, Bunnik is expanding into new territories.
Australia’s first glamping retreat turns 25
25th anniversary gifts usually come in silver. Ours comes in the way of a news story.
Embrace the journey: Traversing the world with the Shokz OpenRun
If you’ve been on the wrong side of a final call in the airport, or missed the stop on rail journey, it might be time to invest in a pair of Shokz OpenRun headphones. Originally marketed as headphones for fitness fanatics, runners or cyclists with a keen to steer clear of a prang with a car, […]
Tourism Western Australia MD Carolyn Turnbull departs
Turnbull hints her new role will see her staying in the tourism and hospitality industry and who can blame her?
DriveAway launches Brit-Euro Blitz campaign
If agents can put the foot down quick enough and get involved, there are some great prizes to be won.
Fly and Stay Free with the Great Southern
Unlike those dodgy scam phone calls you're getting more and more of, there's no strings attached to this deal.
Sober travel and TikTok guide Australian Gen Z trips
Can you call it a sober holiday if you enjoy a few glasses of red on the flight? We think yes.
Travel DAZE Exec Agenda REVEALED: top execs to speak on airline competition
As the industry reels from Bonza's implosion, it is more important than ever to ask the big questions.