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InterContinental soars on report of buyout bid

Shares in InterContinental Hotels climbed to a record in London yesterday after Sky News reported that it had spurned a takeover bid valuing it at about £6 billion (R104bn).

Shares in the largest provider of hotel accommodation rose as much as 6.7 percent to £23.75, the highest since the company was formed in 2003. By 1.30pm in London the shares had pared their gains to 3.95 percent, giving it a market value of £5.92bn. The UK market was closed on Monday.

A Holiday Inn hotel in London operated by InterContinental Hotels. Analysts at Exane BNP Paribas dubbed as credible a report that the hotel group had spurned an offer to buy it for 6 billion pounds. The UK-based firm has been the best performer on the FTSE 100 index in the past three months, advancing 15.4 percent compared with the index's rise of less than 1 percent. Photo: Bloomberg. Credit: Bloomberg

InterContinental, the owner of the Holiday Inn brand, declined to comment on Sky’s Saturday report.

Sky said InterContinental had rejected an offer from a US firm “a few weeks ago” because it was too low. Sky did not reveal the source of the information.

“We consider the report to be credible and think the news will support InterContinental’s stock price in the coming weeks,” analysts at Exane BNP Paribas wrote in a research note on Monday. “This might launch a new mergers and acquisition wave in the sector.

“The battle for market share against online travel companies was likely to “trigger a race for critical size in the atomised hotel sector”, Exane BNP Paribas said. – Bloomberg

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