InterContinental Hotels to announce $4bn expansion

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The Independent Online

InterContinental Hotels, the world's largest hotelier and the City's latest takeover contender, is set to unveil a $4bn (£2.1bn) investment in new properties.

InterContinental owns seven hotel brands, including Holiday Inn and Crowne Plaza, but the money is being spent solely on its InterContinental-branded, five-star chain. It is thought the group, due to update shareholders on the investment when it posts results on Tuesday, will confirm that it now has around 150 of the high-end hotels - up from 136 a year earlier - and that developers are spending the cash on more than 30 new sites.

InterContinental has a portfolio of nearly 3,700 hotels, but owns just 24 of them. New properties are built by specialist developers, under either franchise deals or management contracts.

The FTSE 100 company declined to comment ahead of the results. But it is understood that the new hotel pipeline includes the first InterContinental in Moscow and one in Davos, Switzerland, which will become headquarters to the World Economic Forum's annual summit.

InterContinental became the subject of takeover speculation earlier this year after it emerged that the tycoons Sir David and Sir Frederick Barclay, through their investment vehicle Ellerman Corporation, had bought a 5 per cent stake.

The brothers saw the value of their investment jump as the shares soared on the news. And they could benefit further, as InterContinental's chief executive, Andy Coslett, is to announce this week plans to return cash to shareholders. Analysts believe this could be as much as £900m. The company has already returned around £3bn, mostly raised by selling properties.

But investors hoping that Mr Coslett will comment on the bid speculation will be disappointed. Sources say there has been no further contact with Ellerman since an initial meeting earlier this year.

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