The billionaire Barclay brothers have sold their entire 10 per cent shareholding in InterContinental Hotels Group for £335m, ending any fading speculation about their strategic intentions for the hotel group.
News of the transaction sent shares in IHG, which also operates Holiday Inn and Crowne Plaza hotels, tumbling by more than 7 per cent to 1,115.74p. Following a surge in IHG's share price over the past year, Barclays Capital yesterday placed the 29.9 million shares on behalf of David and Frederick Barclay's investment vehicle, Ellerman, with more than 60 investors. According to City traders, the shares were placed at 1,120p apiece.
The brothers, who also own the Ritz hotel in London and the Telegraph Media Group, started buying IHG shares at the end of 2006. By May 2007 they had built up a 10 per cent holding, bought at an average price of between 1,100p and 1,150p. The stake-building ignited IHG's shares, which hit 1,659p in May 2007, as investors anticipated corporate action by the brothers. But this never materialised and IHG, along with other major hoteliers, was hit by the recession. After falling to a five-year low below 450p early last year, shares in IHG have headed back towards the levels at which the Barclays invested.
Last week IHG held an investor roadshow in the US, attended by two representatives of the brothers.
For its first quarter to the end of March, IHG posted a 15 per cent rise in operating profit to $83m (£54m) amid a recovery in the hotel sector.