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Special Dividend and Share Consolidation

On 20 February 2007 the Board of IHG announced its intention to return £700 million to Shareholders by way of a Special Dividend. The Board today announces it is publishing a circular (the "Circular") setting out full details of the proposed Special Dividend and associated Share Consolidation and convening an Extraordinary General Meeting to be held on Friday 1 June 2007 at 12.00pm, or as soon as the Company's Annual General Meeting convened for that date has concluded.

It is proposed that the payment of the Special Dividend of 200 pence per Existing Ordinary Share be accompanied by a consolidation of the Company's ordinary share capital. The Special Dividend will be paid as a first interim dividend in respect of the financial year ending 31 December 2007 and is expected to be paid to Shareholders on Friday 15 June 2007. The Company has elected to pay the Special Dividend to all ADR holders in US Dollars. The rate to be paid by the Company will be US$4.00 per Existing ADS.

The Share Consolidation will replace every 56 Existing Ordinary Shares with 47 New Ordinary Shares. Upon the Share Consolidation, the nominal value of the Ordinary Shares will change from 113/7 pence per Ordinary Share to 1329/47 pence per Ordinary Share. Fractional entitlements arising from the Share Consolidation will be aggregated and sold in the market on behalf of the relevant Shareholders. The proceeds of the sale are expected to be sent to Shareholders on Friday 15 June 2007. The value of any Shareholder's fractional entitlement will not exceed the value of one New Ordinary Share.

As at the close of business on Wednesday 2 May 2007 (being the last practicable date prior to the posting of the Circular) when the closing mid-market price per Existing Ordinary Share was 1,235 pence and there were 355,726,341 Existing Ordinary Shares in issue, the total amount of the Special Dividend was equivalent to 16.1% per cent. of the market capitalisation of the Company. The effect of the Share Consolidation will be to reduce the number of Ordinary Shares in issue by approximately the same percentage.

As all ordinary shareholdings in the Company will be consolidated, Shareholders' percentage holdings in the issued share capital of the Company will (save in respect of fractional entitlements) remain unchanged.

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