NEW YORK— As Six Continents PLC attempts to ward off derailment of the planned demerger of its hotels and pubs business by British entrepreneur Hugh Osmond, the beleaguered company is seeing the name of rival Hilton Group Plc surface again as a possible contender for some of its portfolio. David Michels, Hiltons chief executive, said he was monitoring the situation at 6C, against which Osmond appears intent on launching a £5.64 billion (US$8.91 billion) bid via Capital Management & Investment (CMI), according to reports out of London. “We have a fiduciary duty to look at any company,” said Michels, according to the Telegraph. Hilton, which failed at merger talks with 6C last year, recently hired UBS Warburg to tandem with existing adviser Deutsche Bank to monitor the Six Continents situation, the report said. As previously reported by HOTEL BUSINESS®, U.K.-based Hilton Group last week dismissed speculation it was one suitor considering a possible merger with Six Continents, which owns the Holiday Inn, InterContinental and Crowne Plaza brands. Some observers in Europe feel Hilton Group would be more interested in retaining InterContinental and Crowne Plaza and spinning off the Holiday Inn group, which includes Holiday Inn Express and Staybridge Suites However, with the Six Continents’ lodging portfolio of more than 3,300 hotels representing 515,000 rooms valued at approximately £3.4 billion ($5.5 billion), it was unclear if Hilton Group could be a serious contender cashwise. Michels yesterday reported while the Group’s betting and gaming division (Ladbroke) showed the largest annual increase— 32% to £149 million (US$234.6 million)— in 50 years, hotel profits were down 17% to £212 million (US$333.7 million). As reported earlier, Osmond and Alan McIntosh of CMI met briefly Tuesday night to discuss a bid plan with Tim Clarke, the current chief executive who will head the pubs division (Mitchells & Butlers), and Richard North, who will lead the hotels unit (InterContinental Hotels Group) when the expected demerger is finalized in April. Shareholders are scheduled during meetings on March 12 to vote on the proposed plan, which would also return £700 million (US$1.1 billion) to them. Reports also indicate Osmond now has the added backing of HBOS Bank, with some £1 billion to £2 billion (US$1.57 billion to US$3.15 billion) of debt to fund the bid was already being arranged by his advisers, Credit Suisse First Boston and Lehman Brothers.— Stefani C. O’Connor
