August 4, 2014 / 12:35 PM / 3 years ago

UPDATE 1-Activist investor Marcato steps up push for change at IHG

(Adds details, background, no comment)

By Neil Maidment

LONDON, Aug 4 (Reuters) - Activist investor Marcato Capital Management has hired an investment bank to advise it on strategy at InterContinental Hotels Group Plc (IHG), three months after reports the firm had rebuffed a 6 billion pounds ($10 billion) takeover bid.

Marcato, which said it owns a stake of around 4 percent in IHG, said it had hired Houlihan Lokey to help review various alternatives, including improving the hotels group’s capital structure and/or capital allocation and strategic transactions.

“Marcato believes current, favourable market conditions ... exist to significantly enhance IHG shareholder value, which may not be available in the future,” the firm said. It gave no further detail on what the alternatives might consist of.

IHG had been urged by Marcato in May to consider a tie-up with a rival that would reshape the hospitality industry, after British media reports said the company had rebuffed a 6 billion pound U.S. takeover offer from an unnamed suitor.

Marcato said it intended to engage with IHG’s board and with other shareholders in the company, which runs some 4,700 hotels including under the Crowne Plaza and Holiday Inn names as well as its namesake brand.

IHG has not commented on the reported takeover offer or on Marcato’s statements and on Monday declined to comment when contacted by Reuters.

Marcato was unavailable for further comment.

Shares in IHG, which have risen 30 percent on a year ago, were flat at 2,375 pence by 1201 GMT, valuing the business at 5.6 billion pounds.

The company, due to report its half-year results on Tuesday, had said in early May it would return $750 million to shareholders and was considering selling off more hotels to boost future cash returns, bolstering its share price.

$1 = 0.5944 British Pounds Editing by David Holmes

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