11 March 2005 – LAWFUEL – The Law News Network – Linklaters acts for Intercontinental Hotels Group on the £1 billion sale of 73
hotels in the UK – the largest deal in the leisure sector this year
Linklaters has advised InterContinental Hotels Group (IHG) on the £1 billion sale of
73 hotels to LRG Acquisition Limited (“LRG”), a consortium comprising Lehman
Brothers Real Estate, GIC Real Estate and Realstar Group. IHG will continue to
manage the bulk of the hotel portfolio under 20 year management contracts with two
consecutive options to extend the contracts for five years each. The deal will
enable IHG to maintain its leading UK market position and its Holiday Inn brand
distribution. The proceeds of this and other recent disposals will be used to return
funds to shareholders, to fund investment in the business and pay down debt.
Commenting on the transaction, Linklaters partner Mark Stamp, who led the Linklaters
team on the deal, said:
“This is the largest deal in the leisure sector this year and we are delighted to
have worked with InterContinetal Hotels, helping them to achieve the disposal of
their UK hotel portfolio and negotiation of attractive management contracts. We are
also delighted to have been instructed on their return of capital to shareholders.”
The 73 hotels were placed on the market in September 2004 as part of IHG’s ongoing
asset disposal programme. In addition to the consideration LRG has agreed to invest
an incremental £21 million of improvement capital in the portfolio. IHG is also
proposing a further £1 billion return of funds to shareholders.
The deal was announced on 10 March 2005. The Linklaters team was led by corporate
partner Mark Stamp, property partner Patrick Plant, Kate Cheetham and Andy Bruce.