|Bid||53.25 x 800|
|Ask||53.16 x 1000|
|Day's range||52.99 - 54.11|
|52-week range||25.39 - 69.12|
|Beta (5Y monthly)||0.92|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||02 Apr 2020|
|1y target est||63.00|
(Bloomberg) -- Service Properties Trust will terminate a management agreement with InterContinental Hotels Group Plc for a portfolio of 103 hotels after IHG failed to pay minimum returns and rents due.The Newton, Massachusetts-based real estate investment trust, led by Chief Executive Officer John G. Murray, will transfer the branding and management of those hotels to Sonesta International Hotels Corp., effective Nov. 30, the REIT said in a statement Tuesday, confirming an earlier report by Bloomberg. Some of the properties may be repurposed or sold, the company said.The portfolio is composed of 81 extended-stay hotels and 22 full-service hotels and resorts in the U.S., Canada and Puerto Rico. They include three InterContinental hotels, five Kimpton Hotels as well as other brands such as Candlewood Suites and Holiday Inn.Service Properties “has indicated its intent to terminate the management agreement with IHG, effective November 2020,” an IHG spokesman said in an emailed statement.“As the industry continues to recover from the unprecedented impact of Covid-19, IHG is committed to remaining in sound financial condition by reducing costs and protecting cash flow, ensuring our management agreements are in line with this approach,” the representative said. “We are well capitalized and maintain a total available liquidity of $2 billion.”Service Properties previously sent notices of termination to IHG for failing to pay $26.4 million in returns and rents due for July and August. The agreement called for annual payments totaling $216.6 million, according to a filing for the quarter ended June 30.The two companies “have had a long relationship which began in 2003, but we were unable to reach a mutually agreeable resolution to the defaults by IHG under our management agreements with them,” Murray said in Tuesday’s statement. “Therefore, after a period of negotiation with IHG, we determined to terminate IHG and rebrand these hotels with Sonesta.”Service Properties owns about 34% of Sonesta, which currently manages more than 50 of the REIT’s hotels, including 16 that were rebranded from IHG in 2012.Like most REITs operating in the hospitality sector, Service Properties’ stock has been hammered by the pandemic, which all but halted travel earlier this year. Shares of the company, managed by an affiliate of Adam Portnoy’s RMR Group Inc., have tumbled about 65% in 2020. That compares with a decline of about 48% for a Bloomberg index of hotel REITs.(Updates with Service Properties, IHG comments starting in first paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Today we will run through one way of estimating the intrinsic value of InterContinental Hotels Group PLC (LON:IHG) by...
(Bloomberg Opinion) -- With international travel decimated by Covid-19, it’s a dark time for hoteliers. So it’s hardly surprising that Accor SA might be interested in a merger with London-listed InterContinental Hotels Group Plc, owner of the Crowne Plaza and Holiday Inn brands.France’s Le Figaro newspaper reported that Accor’s chief executive officer, Sebastien Bazin, considered an approach for the rival company before deciding the timing wasn’t quite right. But if a deal could be agreed, there would be an opportunity to strip out costs to help the chains navigate the current crisis. It would also put them on a surer footing when an upturn eventually comes.IHG operates a so-called “asset-light” business model, where it doesn’t own much property — preferring instead to franchise its brands and offer hotel-management services to the owners. Its French rival has moved in this direction too, which limits the savings you’d get if you were combining two big property portfolios. Nevertheless, there are other costs that could be cut in areas such as centralized bookings, property management and the procurement of goods used by hotels. IHG and Accor are respectively the world’s fourth- and fifth-biggest hotel operators, and there would also be geographical advantages to bringing them together. IHG is the market leader in China and is strong in the U.S., while Accor is number one in many other regions, according to analysts at Bernstein.The two companies are especially concentrated in the mid-market, through chains such as Accor’s Ibis and Novotel brands. These cater more to domestic travelers, so they’re better placed to recover more quickly from the pandemic.The problem is that the very circumstances that make a deal desirable also render it difficult to construct. Shares in Accor have fallen 40% since before the pandemic — about twice as much as IHG stock. So Accor has suffered much more, leaving it as the smaller party. That makes it harder for Bazin to initiate talks from a position of strength. Based on their market values, a nil-premium merger would give IHG shareholders 57% of the combined company and Accor’s 43%. In another unhelpful development, Accor’s bonds were cut to a junk rating by Standard & Poor’s on Wednesday. And its shareholder base is complicated: China’s Jinjiang International and the Qatar Investment Authority are its two biggest investors, each owning stakes of between 11% and 12%.A bigger concern is that negotiating a deal in the midst of a travel maelstrom is challenging. The two sides would have to make assumptions about how quickly consumers will start returning to hotels, and when companies will be prepared to send their staff on trips again. Against this backdrop, it’s not easy to work out a fair price. Both sides are at risk of being caught out.Still, if a deal can be done, it has some merit. Travel will recover at some point, and a more muscular group would be better placed to negotiate franchise deals with property owners and to use its combined marketing clout to snag more customers. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.