InterContinental Hotels has promised to return £1 billion to shareholders following the sale of 73 hotels, including almost all its estate in the UK.
The share move came as InterContinental unveiled a deal with a consortium of investors called LRG Acquisition that will see InterContinental retain 20-year management contracts on most of the hotels being sold.
Proceeds from the £1 billion deal and other recent hotel disposals will be used to fund investment in the business, repay debt and mark a further return of capital to shareholders.
The pledge to give back £1 billion is in addition to a similar sum already promised to investors by the Windsorbased hotels group. The total windfall is equivalent to 80 per cent of the market value of the company when it separated from former Bass company Six Continents in 2003.
The four Crowne Plaza hotels, 68 Holiday Inns and one Express by Holiday Inn hotel being sold were placed on the market in September as part of plans by InterContinental to concentrate on management and franchises.
Analysts have approved of this strategy, which they say reduces its exposure to swings in demand for hotel accommodation. Fees for managing the 73 hotels are expected to net InterContinental around £12 million in the first full year, with more performancerelated payments in the future.
Most of the hotels being sold are located in the United States but they also include properties in the Netherlands, Canada, Puerto Rico, Australia and Vanuatu.
Among the sites in the UK are the Crowne Plaza in Manchester and Holiday Inns in Preston, Swansea, Plymouth, Middlesbrough and Sheffield.
The announcement follows the sale of 13 hotels in December for $425 million (£220.3 million) and the disposal of 85 per cent stakes in two hotels in the US last month for $ 287 million (£148.8 million).
Details emerged as Inter-Continental announced pretax profits of £309 million for the year to December 31 - in line with market expectations and higher than the £244 million a year ago.
Chairman David Webster described a "positive" outlook for this year with corporate bookings fuelling growth in revenue per available room in London and the rest of the UK.
The group was also encouraged by its performance in North America, but signs of weakness were visible in many key markets in mainland Europe such as France and the Benelux nations.
Turnover rose 5.9 per cent at constant exchange rates to £1.5 billion in 2004 and Inter-Continental said bookings were well ahead of a year ago.
Shares in InterContinental closed up 11.5p to 676.5p.