Wall St. Analysts Talk Of Hotel Mergers

NEW YORK— Wall Street analysts are watching more than stock pricing vis-à-vis the hotel industry these days; it seems they are similarly tuned-in to consolidation possibilities facing the hotel arena. As noted during a Wall Street’s Crystal Ball Session June 4 at the 24th annual NYU Investment Conference here, a group of high-powered market-watchers haven’t been unduly surprised by recent merger and takeover activity. On the contrary, they maintained they might be surprised if certain other moves don’t ultimately take place. Specifically, Joyce Minor of Lehman Brothers said she wouldn’t rule out MeriStar’s revisiting of merger talks with Felcor in the future. Meanwhile, Bear Stearns’ Jason Ader offered two developments that bear watching: one, that Hilton Hotels and Hilton International may ultimately come together; and two, it may well be European companies are better-positioned financially to pay more for an asset than their U.S. counterparts. Continuing on a European course, Salomon Smith Barney’s Michael Reitbrock said Six Continents’ recent announcement of a stock-buyback if some suitable acquisition isn’t targeted soon seems like an indication that London-based firm’s purchasing window is closing rapidly in the face of somewhat limited acquisition opportunity. Additionally, David Anders of Merrill Lynch put a spin on the Six Continent’s situation that this seeming purchase anxiety may mean the firm is ready to pay a bit more for an acquisition. —Michael Billig