China’s Anbang Insurance Group, which failed in its bid to acquire Starwood Hotels & Resorts earlier this year, has now turned its attentions to IHG.
The UK’s Sunday Times newspaper reported today (7 August 2016) that Anbang is “weighing up an audacious GBP7 billion (US$91.bn) swoop” on InterContinental Hotels Group, which owns the Crowne Plaza and Holiday Inn brands among others.
If true, that bid would be almost US$5bn less than the US$14bn Anbang offered for Starwood – a company much smaller than IHG in terms of portfolio size. The Chinese group was however, involved in a bidding war with Marriott at the time.
While the Sunday Times said that Anbang is yet to make a formal approach for IHG, it cited “city insiders” as saying that “exploratory” discussions between the two companies have been underway since June.
IHG is believed to have made enquiries about Starwood last year, prior to Marriott’s initial bid in November 2015 and Anbang’s subsequent interest. In a recent interview, IHG’s CEO Richard Solomons said that his company did not need to make acquisitions “for the sake of being bigger”. The company did complete the US$430 million purchase of US-based hotel and restaurant operator Kimpton in 2014, but this was considered a strategic move to expand in the trendy boutique hotel sector.
London-listed IHG is reported to have rejected a bid from US hospitality giant Wyndham Worldwide in 2014, and the Sunday Times suggests that any offer from Anbang could spark renewed interest from Wyndham.
At the end of the June 2016, IHG operated a total portfolio of 5,070 properties, 3,676 of which were under the Holiday Inn or Holiday Inn Express brands. The company’s total global inventory stood at 749,721 rooms. IHG also has a pipeline of 1,407 hotels comprising 222,233 rooms.
Anbang initially made waves in the hotel industry in 2014 when it acquired New York’s Waldorf Astoria hotel for US$1.95bn.
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