Starwood Hotels (HOT) Name Comes Up as Possible IHG (IHG) Suitor
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With speculation over the weekend that Intercontinental Hotels Group plc (NYSE: IHG) turned away a $10.1 billion takeover approached from an unnamed U.S. suitor, Starwood Hotels' (NYSE: HOT) name has come up. The main reason cited for the potential takeover was tax inversion.
Commenting on the bottom line from a pontential deal, FBR Capital analyst Nikhil Bhalla said: "On the surface (and in the absence of knowing the price consideration), we believe the transaction would have made sense for HOT given the immediate benefit of size, brand footprint,pipeline growth, and potential tax savings in the future. It is quite possible that HOT had initially considered the idea in 1Q at which time the company did not repurchase any shares. But recent commentary from HOT has indicated that the company intends to exhaust the remaining $614M share buyback authorization before the end of the year, signaling to us that such a transaction is no longer in the works. We believe one reason why the company's balance sheet remains significantly under levered is because of a potential acquisition in the future."
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