Disposal

InterContinental Hotels Group PLC
10 March 2005

                         INTERCONTINENTAL HOTELS GROUP

         SALE OF 73 HOTELS IN UK FOR £1 BILLION; FURTHER RETURN OF FUNDS



InterContinental Hotels Group PLC ("IHG") today announces subject to, inter
alia, EU merger clearance:



  • the sale of 73 hotels with management contracts (with estimated fees of
    £12m per annum in the first full year) enabling IHG to maintain its strong
    UK market position and Holiday Inn brand distribution. The buyer is LRG
    Acquisition Limited, a consortium comprising Lehman Brothers Real Estate
    Partners, GIC Real Estate and Realstar Asset Management ("LRG").

  • a sale price of £1bn before transaction costs; £960m in cash and £40m
    deferred contingent cash consideration compared with a net asset value for
    the hotels of £1,022m; and

  • subject to completion of the sale, a proposed further £1bn return of funds
    to shareholders in conjunction with a capital restructuring.



IHG has agreed to sell 73 hotels in the UK to LRG at a sale price of £1bn in
cash. Receipt of £40m of the total proceeds has been deferred, contingent upon
certain pre-agreed performance targets being reached. The proceeds from this and
other recent hotel disposals will be used to return funds to shareholders, to
fund investment in the business and to pay down debt. The sale is expected to
complete in the second quarter of 2005.



The 73 hotels to be sold (12,841 rooms) were placed on the market in September
2004 as part of IHG's continuing asset disposal programme and have a net asset
value of £1,022m. They consist of 4 Crowne Plaza hotels, 68 Holiday Inn hotels
and 1 Express by Holiday Inn hotel. The hotels include a core portfolio of 63
hotels and a secondary portfolio of 10 hotels. In addition to the consideration,
LRG has agreed to invest an incremental £21m of improvement capital in the core
portfolio.



The core portfolio of 63 hotels will continue to be managed and branded by IHG
under 20 year management contracts with LRG. IHG has two consecutive options to
extend the contracts on the core properties for 5 years each, giving a total
potential contract length of 30 years.  For the secondary portfolio of 10
hotels, which represent only 5% of the EBITDA of the whole portfolio, if LRG
wishes to maintain an IHG brand on the properties after 2007, they must invest
in the properties to comply with brand standards.



IHG is now proposing a further £1bn return of funds to shareholders. This will
require a capital restructuring to enable the release of funds. Details of the
capital restructuring and proposed method of returning funds will be contained
in a Circular to be sent to shareholders in due course.  Subject to necessary
approvals, including from shareholders, completion of sale transactions and
there being no material adverse change in market conditions, it is intended to
complete the restructuring by the end of June 2005 and to return funds to
shareholders as soon as practicable thereafter.



Since Separation in April 2003, including today's announcement, IHG has sold or
agreed to sell 121 hotels with proceeds of £1.75 bn, close to net book value,
and announced the return of £2bn of funds, of which £767m has been returned.



Richard Solomons, finance director of IHG, commenting on the transaction and
return of funds said:



"This is a significant step forward in the execution of our strategy and we have
achieved attractive management contracts.  These long term contracts give us
excellent continued representation for Holiday Inn in the UK, one of our most
important markets globally, and illustrate our strength as one of the leading
hotel management companies in the world. Our strategy of focusing on branding,
franchising and managing hotels continues to generate significant value for
shareholders. We can now operate with a significantly lower capital base. I am
very pleased to be able to announce the return of a further £1bn to
shareholders, taking to £2bn the total we have committed to return, and
enhancing our return on capital employed as a result."


Mark H. Newman, Managing Director, Lehman Brothers Real Estate Partners LP
added:

"We are very pleased to acquire this portfolio from InterContinental Hotels
Group plc and look forward to working together with them and our joint venture
partners GIC Real Estate and Realstar Group."



Dr Seek Ngee Huat, President of GIC RE said,:



"We are delighted to be extending our global hotel portfolio in this venture
with our partners Lehman Brothers Real Estate Partners and Realstar as well as
the strong IHG brands."



Jonas Prince, Chairman of Realstar Group said:

"This acquisition represents a significant opportunity for us as these
properties offer tremendous value in terms of real estate and brand equity. We
are excited to be working in tandem with our joint venture partners and IHG to
ensure the continued integrity and viability of these properties."



Transaction details



1. The buyer is LRG Acquisition Limited (a consortium comprising Lehman Brothers
Real Estate Partners, GIC Real Estate and Realstar Group)



2. Net asset value of hotels sold of £1.02bn comprising net book value of
£1.08bn offset by deferred tax liabilities in the companies sold of £57m. All
numbers are stated under UK GAAP for simplicity and consistency.



3. The P&L tax charge and cash tax payable on this transaction is not expected
to exceed £5m



4. Expected management fees are initially in the region of £12m in the first
full year, with additional incentive fees potentially payable thereafter.



5. UK sale transaction conditional upon, inter alia, EU merger clearance; return
of £1bn of funds conditional upon, inter alia, shareholder approval, completion
of disposal transactions and no material adverse change in market conditions.



6. Receipt of the deferred proceeds is contingent on meeting performance targets
in 2005, 2006 and 2007. Proceeds are also subject to a working capital
adjustment on completion.



7. Since Separation in April 2003, including today's announcement, IHG will have
sold 121 hotels with proceeds of £1.75bn, almost half the hotel assets owned at
Separation in April 2003. 16 properties remain on the market with a net book
value of £360m.



8. Sales announced today: 73 hotels, 12,841 rooms, proceeds of £1.0bn:


                                                      2004            2003
                                                         £               £
Revenue                                                342             322
EBITDA                                                 107              95
EBIT                                                    69              60

Note: Profits before allocation of interest and tax


Hotel                                              Location          Rooms
IC Austin                                                US            189
IC Central Park South                                    US            208
IC Chicago                                               US            807
IC Houston                                               US            485
IC Miami                                                 US            641
IC San Juan                                     Puerto Rico            402
IC Toronto                                           Canada            210
IC Mayfair                                               UK            289
CP Amsterdam                                    Netherlands            174
CP Hilton Head                                           US            340
CP Los Angeles Airport                                   US            613
CP Redondo Beach                                         US            346
CP White Plains                                          US            401
CP Midland Manchester                                    UK            303
CP Vanuatu                                          Vanuatu            140
HI Anaheim                                               US            264
HI Atlanta Airport                                       US            190
HI Memphis                                               US            243
HI South Bend                                            US            229
HI Gatwick Crawley                                       UK            217
HI Middlesbrough/Teeside                                 UK            134
HI Preston                                               UK            129
HI Plymouth                                              UK            112
HI Sheffield West                                        UK            138
HI Swansea                                               UK            106


                                                   Location          Rooms
HI Adelaide                                       Australia            193
HI Darwin                                         Australia            183
HI Newcastle                                      Australia             72
SBS Alpharetta                                           US            118
SBS Anaheim                                              US            143
SBS Atlanta Perimeter                                    US            143
SBS Auburn Hills                                         US            118
SBS Austin                                               US            121
SBS Boston                                               US            133
SBS Burlington                                           US            141
SBS Carmel Mountain                                      US            116
SBS Charlotte                                            US            117
SBS Columbia                                             US            118
SBS Denver                                               US            115
SBS Eatontown                                            US            131
SBS Fort Lauderdale                                      US            141
SBS Houston Galleria                                     US             93
SBS Myrtle Beach                                         US            119
SBS Portland                                             US            117
SBS San Antonio                                          US            118
SBS Sorrento                                             US            131
SBS Toronto Markham                                  Canada            120
Posthouse Epping                                         UK             79
UK Portfolio                                             UK          12841
Total                                                   121         23,031



For further information, please contact:


Investor Relations (Gavin Flynn/Paul Edgecliffe-Johnson)    [phone]
                                                            [phone]
Media Enquiries (Leslie McGibbon)                           [phone]
                                                            [phone]



Notes to Editors



InterContinental Hotels Group PLC of the United Kingdom (LON:IHG, NYSE:IHG
(ADRs)) is the world's most global hotel company and the largest by number of
rooms.  InterContinental Hotels Group franchises, manages, leases or owns,
through various subsidiaries, more than 3,500 hotels and 534,000 guest rooms in
nearly 100 countries and territories around the world. The Group owns a
portfolio of well recognised and respected hotel brands including
InterContinental(R) Hotels & Resorts, Crowne Plaza(R) Hotels & Resorts, Holiday
Inn(R) Hotels and Resorts, Holiday Inn Express(R), Staybridge Suites(R),
Candlewood Suites(R) and Hotel IndigoTM, and also manages the world's largest
hotel loyalty program, Priority Club(R) Rewards, with more than 23 million
members worldwide. In addition to this, InterContinental Hotels Group has a
controlling interest in Britvic, the second largest soft drinks manufacturer in
the UK.


For the latest news from InterContinental Hotels Group, visit our online Press
Office at www.ihgplc.com/media


Lehman Brothers (ticker symbol: LEH), an innovator in global finance, serves the
financial needs of corporations, governments and municipalities, institutional
clients, and high net worth individuals worldwide.  Founded in 1850, Lehman 
Brothers maintains leadership positions in equity and fixed income sales, 
trading and research, investment banking, private investment management, asset 
management and private equity. The Firm is headquartered in New York, with 
regional headquarters in London and Tokyo and operates in a network of offices 
around the world.  For further information about Lehman Brothers' services, 
products and recruitment opportunities, visit our Web site at www.lehman.com.



Lehman Brothers Real Estate Private Equity currently includes Lehman Brothers
Real Estate Partners (LBREP), a full-service real estate merchant banking fund.
This global real estate fund makes direct private equity investments in
properties, real estate companies and service businesses ancillary to the real
estate industry primarily in North America and Western and Central Europe, as
well as in other international markets. LBREP is an extension of Lehman
Brothers' real estate franchise, which has a long and successful track record of
advising, underwriting and investing in over $100 billion of real estate
transactions over the past three years.


By the end of the first fund's Commitment Period in November 2004, LBREP had
committed more than $1.8 billion in equity across 66 transactions in 26 states
in the U.S., seven European countries, Puerto Rico and Canada, including, for
example, the diversified Tornet Portfolio in Sweden and the WTF (Swisscom)
Portfolio in Switzerland.





GIC RE



Headquartered in Singapore, GIC RE  Is the real estate investment arm of the
Government of Singapore Investment Corporation (GIC) that manages the foreign
reserves of Singapore.  The company manages a multi - billion dollar portfolio
of direct and indirect property investments worldwide. For more information
please visit our website at www.gicre.com





Cautionary note regarding forward-looking statements

This announcement contains certain forward-looking statements as defined under
US law (Section 21E of the Securities Exchange Act of 1934). These
forward-looking statements can be identified by the fact that they do not relate
to historical or current facts. Forward-looking statements often use words such
as ' target', 'expect', 'intend', 'believe' or other words of similar meaning.
By their nature, forward-looking statements are inherently predictive,
speculative and involve risk and uncertainty. There are a number of factors that
could cause actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements. Factors that could
affect the business and the financial results are described in "Risk Factors" in
the InterContinental Hotels Group PLC Annual Report on Form 20-F filed with the
United States Securities and Exchange Commission.




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