InterContinental wants new bids for NY's Barclay Hotel
LONDON (Reuters) - InterContinental Hotels (IHG.L) has failed to seal the sale of its Barclay hotel in midtown Manhattan and is seeking new bids after exclusive talks with a prospective buyer proved inconclusive.
The 1920s New York hotel had been expected to fetch around $300 million and analysts had previously identified Qatari hotel owner Ghanim Bin Saad Al Saad as the likely purchaser.
InterContinental executives put a positive spin on the delay on Tuesday, saying the New York property market had strengthened this year and several rival prospective bidders had come forward in recent months.
"It has taken longer than I might have liked but that sometimes happens when you are trying to maximise value," chief executive Richard Solomons told reporters.
But the hotel is not the first major asset sale in recent months to fall through. Other IPOs and corporate sell offs have collapsed on the back of differences between sellers' expectations and what buyers are ready to buy in tough economic times.
The British-based group, which operates the Crowne Plaza and Holiday Inn as well as InterContinental brands, reported operating profit of $167 million in the quarter to the end of September, just ahead of consensus forecasts, and up from $153 million a year ago.
That came despite a slowdown in China which the company said was in part caused by the impact of a territorial dispute with Japan and a change in the Chinese political leadership.
Shares rose 1.6 percent to 1,549 pence by 0950 GMT.
PARK LANE FOR SALE
The hotelier's strategy of selling hotel assets in return for management contracts is similar to U.S. peers like Marriott MAR.N. InterContinental owns only 10 of its 4,500-plus hotels worldwide with a book value of $1.6 billion.
Next on the block is the group's London Park Lane hotel which analysts value at over $330 million and which the company plans to market next year.
The company returned $500 million to shareholders via a special dividend last month. It said it would start a $500 million share buy back in the current quarter, with the delayed Barclay deal having no impact on the plan.
Revenue per available room (REVPAR), a key hotel industry measure, had grown by 4.8 percent in October, according to provisional trading figures. That was down from 5.6 percent in the first nine months of the year.
U.S. rival Starwood (HOT.N) last month cut its 2012 growth forecast for REVPAR to 5-6 percent, blaming slowing business in China.
For InterContinental, the slowdown was also most marked in the Greater China region where REVPAR declined 0.9 percent in September after growing by six percent the previous month.
Solomons said medium to long-term prospects in China were excellent but said the dispute with Japan and the leadership transition were causing "short-term blips".
"Business and government are so intertwined that it has an impact on activity," he said, referring to the plans by China's ruling Communist Party to announce a new leadership team his month.
In the United States, superstorm Sandy was expected to have only a marginal financial impact despite the damage it caused to the East Coast.
(Writing by Keith Weir, editing by Patrick Graham)
- Tweet this
- Share this
- Digg this
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.