US Edition 
InterContinental Hotels admits group could be sold
IHG chief executive Richard Solomons says they would "look at an approach that was value creating" as activist investor open the door to tax inversion takeover bids
Intercontinental Hotels (IHG) has signalled that it would consider a “value-creating” takeover bid after activist investors sparked speculation of a possible sale by launching a strategic review of the company.
The global hotelier, which owns the Crowne Plaza and Holiday Inn brands, refused to rule out a sale after Marcato Capital, a 4pc shareholder, hired bankers to consider options for “enhancing shareholder value at IHG”.
The British-based company’s chief executive Richard Solomons said they were not consulted before the move, but added a positive approach would be considered by IHG’s “very experienced” board.
Mr Solomons, speaking as IHG's shares dropped after it unveiled an 18pc fall in first-half pre-tax profits, said: "We run the business for the benefit of all shareholders and Marcato is a 4pc shareholder who put an announcement out.
"We didn't talk about the announcement before Marcato put it out. These are new shareholders and we've got a long list of long-standing shareholders who support us in our strategy. I think we've done well by them."
Pushed on whether IHG would consider a takeover bid, Mr Solomons said: "We are a British public company with a lot of shareholders and it's sort of up to them, but our focus is on creating value for them.
"The total shareholder return we've given is up there with the best on a very consistent public strategy, which we will continue to pursue for the benefit of all our shareholders - not just one individual one.
He added: "We're a public company with a very experienced board and chairman, and if there was an approach that was value creating for shareholders of course we would look at it."
His comments came after Marcato said it had "retained Houlihan Lokey as a financial adviser to assist in conducting a full strategic review for enhancing shareholder value at IHG".
"This review will focus on various alternatives including, but not limited to, improving capital structure and/or capital allocation and strategic transactions,” Marcato said in a statement.
"Marcato believes current, favourable market conditions presently exist to significantly enhance IHG shareholder value, which may not be available in the future."
The group invested in IHG around the same time the hotel company spurned a $10bn (£6bn) approach from a US suitor, which is believed to have been Starwood Hotels, owners of the Sheraton brand.
IHG is understood to be a possible target for American companies seeking to switch their domicile to the UK in order to pay less corporation tax; so-called tax inversion takeovers.
On that topic, Mr Solomons said: “"I think the UK has a corporate tax structure that works well for global businesses and the US one is maybe not as user friendly for global businesses.
“We're very comfortable being domiciled here for tax purposes. The UK is a very small part of our business - albeit performing very strongly this half - but it's a good place to be as a global player. The timezone works well and the corporate tax regime is not unhelpful.”
InterContinental profits fell to $377m in the six months to the end of June, down from $462m in the same period last year, on revenue down 3pc to $908m.
Reported operating profits, which adjusts the figures to account for tax and exceptional items, fell 8pc from $338m to $310m due to one-off costs form the disposals of the New York Barclay and San Francisco hotels.
However, InterContinental makes almost two-thirds of its operating profit in the United States, where business is being buoyed by rising levels of business and leisure travel.
This helped boost underlying profit 6pc to $301m and increase revenue per available room - a key measure of profit - by a 5.8pc, which the company said gave it the confidence to raise the interim dividend 9pc to 25 cents, payable on September 26.
Mr Solomons said: "We're in an industry that's growing - people are travelling more and more - and we've got a very strong position within that.
The group's new Hualuxe brand is aimed at Chinese travellers, and will be launched in the country before spreading around the world to cater to Chinese tourists and businessmen.
"It is unique,” the chief executive said. "It's a Chinese brand for Chinese travellers so you have to think about the overall hospitality experience.
“For instance, the arrival experience. There is an awful lot of emphasis in Asia on recognition, which dictates how you handle important guests when they come it.
"The Chinese also tend not to go to bars, they drink tea. They tend not to like big public restaurants, they want private dining rooms.
“The whole experience feels Chinese, as opposed to a localised version of a western brand. The social spaces are very different, the arrival is very different and the bedrooms are very different.”