InterContinental Hotels, the company behind Crowne Plaza and Holiday Inns, has rejected a £6bn bid from a US suitor, according to weekend reports.
The FTSE 100-listed company's board was said to have met a few weeks ago to consider the offer but decided it was too low to accept. Possible bidders included Starwood Hotels & Resorts, the owner of the Le Meridien, or a specialist investment fund such as Starwood Capital, according to Sky News.
InterContinental's attraction to an American business would be to help it save billions by moving its tax domicile to Britain, one of the reasons behind Pfizer's approach to AstraZeneca. Bankers believe more such so-called "tax inversion deals" could be on the way.
Despite the rejection, the predator could return with a new offer, or a rival suitor could emerge. InterContinental's share purchases in the last few days would seem to indicate there are no talks taking place.
InterContinental's chairman, Patrick Cescau, and chief executive, Richard Solomons, have pleased investors with their strategy of moving more towards managing hotels rather than owning them. Earlier this month, the company announced it would return £445m ($750m) to shareholders, funded by the sale of unwanted hotels. The most recent disposals included the InterContinental Mark Hopkins hotel in San Francisco and its 80% stake in the New York Barclay, with analysts suggesting the company had a further $1bn worth of property it could sell and then return the proceeds to shareholders. The InterContinental in Paris is widely expected to be the next on the block.
Since 2003, InterContinental has handed back more than $10bn to investors, including the latest proposed payout.
InterContinental said it never commented on market speculation.