Barclay brothers sell stake in Intercontinental Hotels

by Jessica MCILHINNEY on July 29, 2010

The notoriously secretive Barclay brothers shocked the hotel industry yesterday by cashing in their shares with Intercontinental Hotels.

The surprise sale, which saw the pair offload their 10.4 per stake in the owners of the Holiday Inn chain in a deal worth £330million, put paid to any lingering possibility that the billionaire UK investors might have been putting together a consortium to make a bid for the largest hotel group in the world.

Sir Frederick and Sir David Barclay, who between them own London’s iconic Ritz Hotel along with the Daily Telegraph newspaper, are believed to have suffered a minimal loss on the deal of around £14million, after the initially invested in IHG back in 2007. The timing of the deal has led to wild speculation across the industry as to where the funds may go, with some analysts predicting new ventures while others argue that the cash would be injected into the pair’s estimated £1.8 billion media and retail empire. InterContinental’s fortunes in the past 12 months have improved markedly, with share prices rising by a massive 86 per cent as the economic recovery in the hotel industry takes hold, leading to many hotel experts to be dumbfounded by the Barclay’s decision.

29.9m IHG shares were placed on the market by investment bank Barclay’s Capital at 1,120p yesterday on behalf of the brother’s investment vehicle Ellerman. Though at the lower end of the range, this nonetheless represented the first share placing by Barclays Capital on the FTSE100 since it launched its new equities business in Europe.

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