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Report: Intercontinental Hotels eyes Principal Hotel's luxury brand

InterContinental Hotels Group PLC has joined the running for the acquisition of Principal Hotel Co., which owns the luxury Principal and De Vere hotel brands, The (U.K.) Times reported.

Starwood Capital Group is selling the hotel company in a £1.2 billion auction through UBS.

InterContinental Hotels, in partnership with an unnamed investor, will now bid in the auction, which also includes bidders like former Goldman Sachs executive Nick Weber's property investment firm, Henderson Park, which also owns Le Méridien Étoile, the largest hotel in Paris, according to the March 14 report.

While Henderson Park is bidding for the whole Principal Hotel group, InterContinental Hotels and its partner are said to be eyeing just the Principal brand's 12 city center hotels in the U.K. that include Blythswood Square and the Grand Central Hotel in Glasgow; the St David's Hotel in Cardiff; the Principal Edinburgh George Street, formerly known as the George; and the Principal London, previously the Hotel Russell.

Meanwhile, Principal's De Vere brand, which operates 15 country hotels and conference locations across the U.K. region, has garnered separate interest from potential buyers.

Millennium & Copthorne Hotels PLC Chairman Kwek Leng Beng's CDL Hospitality Trusts and hospitality property investor Highgate are among the prospective suitors interested in parts of Principal Hotel group.

Earlier in March, InterContinental was understood to be vying for one or two small luxury hotel brands to launch them as a new franchised upmarket brand. CEO Keith Barr was cited by Reuters as saying he expects the new brand to generate more income than the company's Holiday Inn Express brand.

If it comes out tops in the auction process, InterContinental would likely rebrand the Principal brand hotel assets under its InterContinental, Crowne Plaza and Kimpton brands and operate them under management contracts, after its partner purchases the properties, The Times added.