Holiday Inn parent IHG has spurned an unsolicited (corrected) $10 billion takeover offer from a U.S. suitor, alleged in some reports to be Sheraton-parent Starwood Hotels & Resorts, according to Sky News and the Telegraph. Other outlets including the Sunday Times have reported the spurned bid scenario, too.
“Sky News has learnt that IHG’s board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low,” the Sky News report says.
Asked about the reports, Starwood’s top communications executive K.C. Kavanagh told Travel Update that “we do not comment on market rumors and speculation.” IHG’s top communications executive in the U.S., Francie Schulwolf, told Travel Update that “we don’t comment on speculation.”
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IHG, the U.K.-based hotel giant that runs the InterContinental, Crowne Plaza and Hotel Indigo brands, may also have attracted the attention of another suitor, the reports says.
A spokesman for IHG declined the Telegraph’s request for comment.
Why would such a deal make sense for Starwood? (Starwood’s biggest brand is Sheraton, but it also runs primarily upscale brands such Westin, St. Regis and trendy W.) Early on Memorial Day morning, Suntrust Robinson lodging analyst Patrick Scholes addressed that very question in a special report.
Starwood: Lacks mid-priced hotel chains
“We always believed a core mid-scale brand has been lacking in Starwood’s portfolio, something that could compete with Hilton’s Hampton Inn and Marriott’s Fairfield brand. Subsequently, the purchase of these brands would make sense for (Starwood) in our view.”
IHG’s Staybridge Suites and Candlewood chains would also give Starwood entry into the extended stay category, notes hotel consultant Gregg Marzano.
Frequent traveler and loyal Starwood customer Sereita Nicole Cobbs hopes a deal like this materializes.
“I’d like more places to use my SPG points!,” she told me via Facebook. “And I’d like to see the Hotel Indigo’s converted to the Aloft brand.”
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The move would also let the American company save on taxes if it switched its tax domicile to the UK, according to Scholes, who noted Pfizer’s just-failed attempt to buy AstraZeneca.
Stay tuned as we learn more about the takeover bid, and whether IHG’s truly in play or not.
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SPG members: Do you ever wish that Starwood had a line of more affordable hotels? Perhaps they’d fit your weekend lifestyle, like when you’re taking your kids to away soccer games, etc…