Six Continents Confirms Split Of Pub, Hotel Businesses

LONDON— Six Continents has confirmed it will be de-merging its hotel and soft drinks business from its pub chain and return £700 million (US$1.1 billion) to shareholders as part of the split. 6C said that Tim Clarke, chief executive, will now become head of the pub business and Richard North, finance director, will head up the hotel division. Ian Prosser, chairman, who was due to retire in July 2003, will now stay on until December to smooth over the transition into two separate companies. The group whose brands include Inter-Continental and Holiday Inns said the split would sharpen management focus and allow the two companies to pursue strategies appropriate to their markets. As part of the de-merger Six Continents shareholders will receive shares in both entities. 6C warned that the year after the share consolidation, it would cut its aggregate dividend for both companies by around 38%, compared to the expected 2002 total dividend per share. Credit ratings agency Standard & Poors put Six Continents on CreditWatch with negative implications. Despite the £700 million (US1.1 billion) returned to shareholders plus special dividend payments which together will amount to £970 million (US$1.5 billion), many thought the group would give more to shareholders following its earlier promise in May that it would return £1bn to shareholders if it made no big hotel acquisitions in the year. Six Continents, which started working on the de-merger in June, is expecting the process to become final in April 2003, following an extraordinary general meeting at the end of February. North said the company would retain the Six Continents name and would look to develop new brands. SOURCE: CBS Market Watch