InterContinental Hotels Group sells Park Lane hotel for 302m pounds

FTSE 100-listed InterContinental Hotels Group (IHG) has agreed to sell InterContinental London Park Lane to Constellation Hotel UK S.A, which is an affiliate of Constellation Hotels, a Middle Eastern private investment group.

FTSE 100-listed InterContinental Hotels Group (IHG) has agreed to sell InterContinental London Park Lane to Constellation Hotel UK S.A, which is an affiliate of Constellation Hotels, a Middle Eastern private investment group.

IHG's leasehold interest in the hotel has been sold for gross cash proceeds of £301.5m, 62% above December 31st 2012 net book value.

IHG has secured a 30-year management contract on the hotel, with three 10-year extension rights at IHG's discretion, giving an expected contract length of 60 years. Management fees are expected to be approximately £4.0m per annum.

The hotel generated revenues of $89m, EBITDA (earnings before interest, tax, depreciation and amortisation) of $39m and EBIT (earnings before interest and tax) of $33m in 2012.

The transaction is expected to complete in the second quarter of 2013, subject to the satisfaction of certain standard conditions.

The proceeds will be used for general corporate purposes, with £61m used to provide security over UK pension liabilities which were previously secured against the hotel.

Richard Solomons, Chief Executive officer of IHG, commented: "The transaction we have announced today to sell InterContinental London Park Lane highlights the value of our asset portfolio and the attractiveness of InterContinental as one of the world's leading luxury hotel brands.

"It is another step in our long standing commitment to reduce the capital intensity of IHG. We are very pleased to be working closely with Constellation Hotels, a respected hotel investor, who will be a great partner and with whom we look forward to building a long term relationship."

MF

Recommended

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Investing in drugmakers: uncommon profits from curing rare diseases
Share tips

Investing in drugmakers: uncommon profits from curing rare diseases

Treatments for medical conditions with only a small number of sufferers can still be very attractive for pharmaceutical companies and investors becaus…
20 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022
Delivering profits: should you buy Royal Mail shares?
Share tips

Delivering profits: should you buy Royal Mail shares?

The volume of parcels delivered by Royal Mail soared during the pandemic, and so did its profits. But it has been coming under pressure lately. So, as…
19 May 2022

Most Popular

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022