Nov. 12, 2002 - Hilton Group, which is set to issue a mixed trading statement this week, is believed to be considering two expansion opportunities in Germany as it seeks to boost its operations on the Continent. 

The company is targeting private hotel chain Steigenberger and is also in talks with Queens Moat Houses about a franchising deal in Germany. 

The deals could help Hilton's chief executive, David Michels, further his aim of expanding in the European middle-market hotel sector on the back of its acquisition of the Scandic chain last year for UKpound 612 million. 

The Steigenberger family are considering strategic options, including the sale of their 70-year-old company, which could command a price of up to UKpound 200 million. 

Steigenberger Hotels & Resorts operates 78 hotels -- 63 are in Germany -- and Hilton is thought to be one of several potential buyers, including French group Accor and American firm Starwood. 

Accor is also vying with Hilton to cut a deal with Queens Moat over 11 of its German hotels. Queens Moat has a franchise agreement with Holiday Inn for these, but it runs out in February. Though the Holiday Inn deal may yet be renewed, Queens Moat is considering alternative partners and the shortlist is down to Hilton and Accor, with a decision expected next month. 

Queens Moat is also believed to be in talks with other hotel groups to use one of their names on its UK properties. 

Though Hilton is expected to confirm the tough environment in the sector this week with a trading statement for the four months to the end of October, its Ladbrokes betting arm is expected to show good progress. 

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UKpound preceding a numeral refers to the United Kingdom's pound sterling.

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