BOSTON Aug 4 Activist hedge fund Marcato Capital Management said on Monday that it has hired Houlihan Lokey as a financial advisor as it seeks to persuade InterContinental Hotels Group to consider selling itself.
The $3 billion San Francisco-based hedge fund owns a 4 percent stake in the hotel group and has been urging the British company to consider combining with a larger hotel operator for several months.
"This review will focus on various alternatives including, but not limited to, improving capital structure and/or capital allocation and strategic transactions," Marcato said in a statement.
The firm, founded by Mick McGuire who was previously a partner at William Ackman's Pershing Square Capital Management, also noted that "current, favorable market conditions" exist now but may not "be available in the future."
A U.S. -based hotel operator has already approached InterContinental, which owns the Holiday Inn and Crowne Plaza brands, a person familiar with the matter said.
This suggests that an American company might seek to buy U.K.-based InterContinental as part of a so-called inversion play where the U.S. company could lower its corporate tax rate by reincorporating abroad. These types of deals have gained in popularity and have been pushed by some activist investors. (Editing by Grant McCool)