UPDATE 1-Peltz's Trian Fund takes stake in InterContinental
* Peltz takes 4.27 percent stake in InterContinental
* InterContinental shares rise 5.2 percent
LONDON May 31 (Reuters) - U.S. activist investor Nelson Peltz said his Trian Fund Management had picked up a stake of 4.27 percent in the world's biggest hotelier InterContinental Hotels Group, pushing its shares to be the FTSE 100 biggest gainer.
InterContinental shares were up 5.2 percent to 1,512 pence by 1415 GMT after a high of 1,537 pence on Thursday after Peltz was obliged to declare the stake once it had gone over 3 percent to comply with UK rules. The FTSE 100 was off 0.1 percent.
The shares, which have been recovering steadily since a low of 929p in August 2011, were the second most heavily traded in the FTSE 100 at 1-1/2 times the 90-day daily average.
InterContinental had no comment to make on the Peltz stake.
Analysts said Peltz would probably be looking to pressure InterContinental to sell more of its fully-owned hotels and secondly be aware that the hotelier may be a takeover target for U.S. hotel chains or even private equity groups.
The British group runs over 4,500 hotels worldwide with the vast majority being franchised or managed and only 10 fully-owned.
However, these hotels in flagship cities like London, Paris and Hong Kong are very valuable - its New York Barclay hotel is up for sale for $300 million.
The hotelier has been selling hotels in return for management contracts and handing the cash raised back to shareholders since the group's creation in 2003, but Peltz may want to speed up this process, analysts said.
In addition, Peltz may be looking at possible consolidation in the industry with Marriott and Sheraton-owned Starwood likely to be interested.
Private equity group Blackstone could also be interested after it bought Accor's U.S. budget hotel business for $1.9 billion last week to add to the Hilton Hotel chain it bought five years ago, they said.
In recent months, billionaire investor Peltz has revealed stakes in companies ranging from PepsiCo to Heinz and Ingersoll Rand in an effort to push for changes. In some cases, Trian has sold its investment soon after, as with Pepsi.
Peltz built up a stake in Britain's Cadbury Schweppes pushing it into a decision to demerge in 2007. After the split Cadbury was taken over by Kraft in 2010.
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