IHG - Sale of 16 Hotels
InterContinental Hotels Group PLC
01 July 2003
1 July 2003
InterContinental Hotels Group PLC -
Sale of 16 Staybridge Suites Hotels to
Hospitality Properties Trust for $185 million
InterContinental Hotels Group PLC (IHG) today announces it has sold 16
Staybridge Suites' hotels in the United States to Hospitality Properties Trust
(HPT) for $185 million in cash. As part of the transaction these hotels continue
to operate within the Staybridge Suites' brand, IHG having entered into a
management agreement on these hotels with HPT for a period of 20 years with
options to extend. The amount paid by HPT is over $15 million more than the book
value of the assets and the sale will not have a material effect on earnings in
the year to December 2003.
Commenting on the transaction Richard North, Chief Executive, InterContinental
Hotels Group said:
"We have successfully developed and grown the Staybridge Suites' brand over the
last five years and it now has critical mass in the upscale extended stay
segment. As a consequence, we no longer need to own these assets. The deal is
consistent with our strategy to prove brand concepts and then reduce capital
intensity whilst converting the income stream into management or franchise fees.
HPT is one of the strongest and most respected real estate investment trusts in
the market and we are delighted to be working in partnership with them"
Richard Solomons, Finance Director, InterContinental Hotels Group said:
"The Staybridge Suites' brand is making good progress with 55 hotels open and
over 40 in the pipeline. This transaction is a direct consequence of the
continuing review of our asset base and represents a step along the path to
improving the group's return on capital."
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For further information, please contact:
Matthew Bates, Investor Relations 020 7355 6676
Dee Cayhill, Corporate Affairs 020 7409 8101
Note to Editors
Staybridge Suites is IHG's organically developed upscale extended stay brand
offering self-catering services and amenities designed specifically for those on
extended travel. There are 55 Staybridge Suites hotels, all of which are located
in the Americas, representing 1% of IHG's total rooms. These properties are now
split 4 owned and leased, 16 managed and 35 franchised.
The transaction involves the sale of 16 Staybridge Suites hotels in the United
States to HPT for $185 million. IHG has simultaneously entered into a long term
management agreement with HPT .
The transaction has features typical of HPT transactions: an owner's priority
return of $16.9 million per year, plus percentage participations in operating
revenues in excess of negotiated amounts; retention of a security deposit equal
to $16.9 million; 5% of gross revenues at the hotels will be escrowed for
capital expenditures; and payment of the owner's priority return to HPT is
guaranteed by IHG until the financial results from IHG's operations of these
hotels reaches negotiated levels. IHG's management contract for these hotels has
an initial term expiring in 2023 and IHG has two renewal options for 12.5 years
each thereafter.
The 16 hotels purchased by HPT have 1,960 guest suites and are geographically
diversified in 11 states: California (2); Colorado; Florida; Georgia (2);
Maryland; Massachusetts (2); Michigan; North Carolina; South Carolina; Texas
(3); and Washington State. The average age of these hotels is about three years.
InterContinental Hotels Group PLC of the United Kingdom (LON:IHG, NYSE:IHG
(ADRs)), owns, manages, leases or franchises, through various subsidiaries, more
than 3,300 hotels and 515,000 guest rooms in nearly 100 countries and
territories around the world (www.ichotelsgroup.com). The Group owns a portfolio
of well recognised and respected hotel brands including InterContinental Hotels
& Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, Express by Holiday Inn
and Staybridge Suites, and also has a controlling interest in Britvic, the
second largest soft drinks manufacturer in the UK.
InterContinental Hotels Group offers information and reservations capability on
the Internet - www.intercontinental.com for InterContinental Hotels & Resorts,
www.crowneplaza.com for Crowne Plaza Hotels & Resorts, www.holiday-inn.com for
Holiday Inn hotels, www.hiexpress.com for Express by Holiday Inn hotels,
www.staybridge.com for Staybridge Suites by Holiday Inn hotels and, for the
Group's rewards programme, www.priorityclub.com
For the latest news from InterContinental Hotels Group, visit our online Press
Office at www.pressoffice.ihgplc.com.
Hospitality Properties Trust is a real estate investment trust headquartered in
Newton, Massachusetts, USA which owns 267 hotels located throughout the United
States.
This information is provided by RNS
The company news service from the London Stock Exchange
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