The rumours were given added impetus when analysts at Merrill Lynch tipped the stock as 'buy' and estimated the sale of InterContinental and Crowne Plaza brands could raise £2.5 billion ($4 billion).
The proposal is more radical than the asset restructuring plans the board is currently considering, but Merrill analyst Andrew Burnett thinks such a sell-off would be a quick and clean way to release capital, cut debt and return cash to shareholders. The research note by Burnett agrees such a sale or IPO spin-off might not generate the same returns as a property disposal programme in which the group would retain management contracts on sites sold. But he adds that a site-by-site sale could be difficult to achieve.
Intercontinental has had a tough year since its spin-off from the old Six Continents in April. A month later the hotel group announced profits down 30% because of the Iraqi War and SARS. The board used the opportunity to announce job cuts and a review of its property portfolio.
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