InterContinental Hotels in the spotlight after bid rumours book a stay
TALK of a bid from a mystery US suitor had many investors queuing up to check into InterContinental Hotels
Group today. The company, whose brands include Holiday Inn as well as the eponymous chain, was on the tips of traders’ tongues as rumours continued to circulate around the City that it could soon be bought.
InterContinental’s board is understood to have rebuffed a £6 billion offer from an unnamed US bidder last year because it was too low. However, investors such as US hedge fund Marcato are keen for it to tie-up with a rival and Starwood Hotels has been named as one potential future partner.
Shares in the company rose 61p to 2789p, having spiked last week .
Overall, the FTSE 100 rebounded from Friday’s losses, climbing 58.74 points to 7053.37. The index was boosted by mining stocks including Anglo American, rising 27p to 1037.5p, Rio Tinto, 46p ahead at 2874p and BHP Billiton, up 20.5p to 1467p, which are benefiting from developments in China, where the government unveiled a stimulus package to boost its economy.
“China is the key story that is driving the FTSE today,” Chris Beauchamp, market analyst at IG, said. “The key is whether we can hold these gains. I’m not confident just yet that this is much more than a bounce after last week’s drop.”
Construction firm Ashtead jumped 20p to 1132p after Barclays raised its target price to 1405p from 1289p.
“We believe the relative share-price weakness year-to-date offers an attractive opportunity given the strong earnings growth we forec ast over the next few years,” analysts at Barclays said.
Financial Times owner Pearson was also up, climbing 23p to 1378p despite Liberum slapping a sell rating on the stock and an 800p target price. It said that changes to Chinese laws surrounding foreign ownership of assets could hit the company.
Finally, tool-hire specialist HSS Hire ma n a ge d to sh ow s o me signs of progress today despite falling to a £8.5 million loss last year on the back of refinancing costs. The company floated at 210p earlier this year, the bottom of its price range, amid concerns from some institutions that it was overpriced. Having fallen below this on debut, the company’s shares rose 2p to 211.2p today.
Boss Chris Davies said it was on the hunt for acquisitions.
“While the forthcoming UK general election creates an element of shortterm uncertainty for our customers, HSS is in good shape and we look to the future with confidence,” he added.
@jdunkley6