Is Starwood Hotels Buying IHG?
There was a bunch of chatter last night about a possible takeover bid for Intercontinental Hotel Group (IHG) and that Starwood Hotels & Resorts was a possible (likely?) suitor.
Is it true? The short answer is I just don’t see it happening.
The longer answer is that I think this is likely a case of mistaken identity combined with excited possibilities of a mega hotel company the likes we don’t see very often. Barry Sternlicht was the long-time CEO of Starwood Hotels & Resorts, but that was while he was (still is) the founder and CEO of Starwood Capital Group, which still actively invests today.
Starwood Capital Group has lots of cash.
Starwood Hotels & Resorts generated a billion dollars in cash-flow last year, but Barry Sternlicht’s Starwood Capital has a bunch more.
It’s not that this couldn’t happen. But, a merger of these two large hotel chains doesn’t look likely from where I stand.
and that’s why you’re a blogger and not an accountant! this isn’t about synergy, it’s about escaping the insane level of corporate taxation in the US. when just changing your address saves a couple of billion $’s, it looks interesting real fast.
i like SPG a lot and think IHG is a joke in terms of having a loyalty program. i’d be concerned that, given its size, IHG would screw up SPG. so i hope it doesn’t happen. but it all comes down to $
Abby, I understand the tax consequences here, and I’m sure that’s very appetizing for IHG and SPG to both realize tax savings. Having reviewed the relative financial positions of the companies, SPG would need to take on a ton of debt to make this deal happen. While that’s possible, it was a lot more likely when Sternlicht was running things.