SAN FRANCISCO—Activist investor Marcato Capital Management is following up its earlier call for Intercontinental Hotels Group to consider merging with a large competitor by retaining Houlihan Lokey as a financial advisor in conducting a strategic review of how to enhance IHG's shareholder value. A spokeswoman for UK-based IHG tells GlobeSt.com the company, the world's largest hotelier with seven brands and 4,700 properties, has no comment.

Marcato says the review will focus on alternatives that include improving capital structure and/or capital allocation and strategic transactions. “Marcato believes current, favorable market conditions presently exist to significantly enhance IHG shareholder value, which may not be available in the future,” the company says. Marcato intends to engage in “direct dialogue with IHG's board of directors and management with respect to the merits of its proposals, as well as broad discussions with IHG shareholders and industry participants.”

In May, Marcato had responded to published reports that IHG had rejected an unsolicited $10.1-billion takeover offer. A statement attributed to Mick McGuire, Marcato's founder and managing partner, said the company believed that an IHG combination with a larger hotel operator would have “compelling strategic and financial merit,” representing “a unique opportunity to reshape the global hospitality industry.”

The unsolicited bidder's identity was not divulged, although Sky News reported in May that possible suitors included Starwood Hotels & Resorts or Starwood Capital Group. The bid likely came from the US, “with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion,” according to Sky News.

IHG's board was said to have considered the offer but rejected it as too low. The owner of the Crowne Plaza, Holiday Inn and Staybridge Suites brands has a market capitalization of approximately $9.4 billion.

Following its advocacy of a merger between IHG and another operator, Marcato made public its dissatisfaction with what it saw as “value-destroying activity” at American Realty Capital Properties. Marcato took exception to ARCP's recent equity issues and to its amassing “too many transformative transactions too quickly.”