InterContinental Sells Two Dozen Hotels in Europe for $352 Million

InterContinental Hotels Group has sold a portfolio of 24 hotels (4,903 rooms) to a subsidiary of Westbridge Hospitality Fund LP. Westbridge is a hospitality investment fund managed by Westmont Hospitality, one of IHGs largest franchisees.

Proceeds to IHG in cash and debt assumption are $345.2 million (before transaction costs), with the balance of 6.8m relating to third party minority interests.

The hotels have been sold to Westbridge with 15-year franchise contracts. Normalized franchise fees are expected to be approximately $4 million a year.

The hotels are located in Continental Europe and operate under the Crowne Plaza, Holiday Inn, and Express by Holiday Inn brands. The transaction is expected to complete in the second quarter of 2006.

These disposals represent a continuation of IHGs strategy to grow its managed and franchised business and reduce asset ownership. Since separation in April 2003, IHG has disposed of, or is in the process of disposing of 175 hotels with a net asset value of more than £2.8 billion.

Aggregate proceeds received to date have been above net asset value. IHG has announced the return of £2.75 billion to shareholders, of which £2.0 billion has already been completed. Proceeds received from the disposal will be used for investment, returns to shareholders, or managing IHGs debt position.