InterContinental Hotels Group plc (2012-2013)
The InterContinental Hotels Group (“IHG”) is a global hotel company with a portfolio of well-known brands.
Trian was attracted to the favorable supply/demand backdrop within the hotel industry in 2012 – the recovering U.S. economy was driving room demand while the number of new rooms under construction was at record low levels. IHG owned four InterContinental-branded hotels in gateway cities, the full value of which Trian believed was not fully reflected in the stock’s valuation. Additionally, Trian believed IHG was trading at a substantial discount to intrinsic value as a predominantly asset-light model.
Trian announced its position in IHG in May 2012. Over the course of Trian’s investment, IHG made significant progress in monetizing its real estate assets, culminating in the sale of assets equivalent to approximately 10% of IHG’s market cap prior to Trian’s involvement, and returned or planned to return $1.35 billion, 18% of IHG’s market cap prior to Trian’s involvement.
Trian was able to work constructively with management and helped the company to execute on its strategic initiatives during Trian’s investment. Trian exited its investment in IHG in early 2013.
Company Website: http://www.ihgplc.com/