Six Continents Officially Spins Off Hotel Biz

London-based Six Continents PLC has created separate entities for the company's hotel and restaurant businesses, effective yesterday. The hotel portion, now known as InterContinental Hotels Group, includes 3,300 properties worldwide under the InterContinental, Crowne Plaza, Holiday Inn, Holiday Inn Express and Staybridge Suites extended stay brands. The restaurant business now is called Mitchells & Butlers.

The spinoff follows a failed hostile takeover bid in February that would have resulted in the outright sale of the hotel business. Speculation remains that other hotel companies now will seek to acquire either IHG brands or individual properties. Marriott International and Starwood Hotels & Resorts Worldwide are cited most often as potential acquirers, but neither would comment on the speculation.

According to Arthur Adler, a managing director of real estate advisory firm Jones Lang LaSalle Hotels, the time might be right for industry asset sales, with many markets presently being at the bottom of the cycle.

For buyers who have preferred relationships in place with IHG, there is uncertainty as to whether their chain deals will be affected. For buyers generally, the speculation around IHG adds to the sense that the hotel industry is in turmoil, which, in turn, increases their overall leverage with their suppliers.