Starwood hires banker to investigate sale

One of the best known brands in the international meetings and events industry could be up for sale.

Starwood Hotels, owner of the St. Regis and Sheraton hotel brands,
has hired Lazard to “explore a full range of strategic and financial
alternatives” to increase shareholder value.

The group has revealed a sharp drop in first-quarter
profits. For the three months to end of March, revenue fell 2.9 per cent to US$1.4bn
from the same period a year before. However net income tumbled by nearly 28 per
cent to US$99m, or 58 cents per diluted shares as the stronger dollar ate into
its overseas earnings.

Starwood warned that it could take a US$45m hit on its full
year earnings for this year if exchange rates stay at current levels. It
expects the challenging currency situation to reduce second-quarter earnings by
US$15m.

Earlier this year, Starwood announced plans to spin-off its
timeshare business into a separate publicly traded company as part of its
so-called “asset-light strategy”.

Some analysts saw the move as a bid to make the business a
cleaner takeover target.

Starwood said that it has just started the strategic review
and will not be making further comments until the review has been completed.

The company said: “No option is off the table, and we will
take the time we need to thoroughly evaluate our opportunities and achieve the
best result for our shareholders, business partners, and associates.”

Shares in hotel group jumped nearly 8 per cent in pre-market
trading.

Do you have a story for CN? Email: jkeenan@mashmedia.net

Paul Colston

Author

Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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