{"id":1004204526,"date":"2018-01-22T06:19:04","date_gmt":"2018-01-22T14:19:04","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004204526"},"modified":"2022-12-08T14:43:17","modified_gmt":"2022-12-08T22:43:17","slug":"wyndham-to-buy-la-quinta-for-2b","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/wyndham-to-buy-la-quinta-for-2b\/","title":{"rendered":"Wyndham to Buy La Quinta for $2B"},"content":{"rendered":"

By Barbra Murray<\/em><\/p>\n

\"La<\/a>

La Quinta Inn & Suites Dallas, Richardson, Texas<\/p><\/div>\n

Wyndham Worldwide Inc. is about to make a big purchase\u2014a $2 billion purchase. The global hospitality company has entered into a definitive agreement to acquire the hotel franchise and hotel management businesses of La Quinta Holdings Inc. in an all-cash deal.<\/p>\n

The financial terms of the deal are multi-faceted. La Quinta stockholders will receive $8.40 per share for a total of $1 billion. Additionally, Wyndham will repay $715 million of La Quinta debt net of cash, and designate $240 million for estimated taxes related to the taxable spinoff of La Quinta’s owned real estate assets into CorePoint Lodging Inc. Financing is in place for the transaction, with Barclays and Deutsche Bank furnishing committed financing to Wyndham.<\/p>\n

When all is said and done, Wyndham will have enhanced its holdings with 890 managed and franchised hotels across the U.S. and in Canada and Latin America, leaving the company with and a 21-brand portfolio encompassing approximately 9,000 hotels spanning more than 75 countries. \u201cThe acquisition increases Wyndham\u2019s footprint, and maybe more importantly, it adds to the company\u2019s development pipeline\u2014unit growth is what investors are willing to pay higher stock valuation multiples for, and shares have reacted very favorable the last two days,\u201d<\/em> Michael Bellisario, senior research analyst with financial services firm Robert W. Baird & Co. told Commercial Property Executive<\/em>.<\/p>\n

The transaction, however, will do more than just expand Wyndham\u2019s collection of properties and potential development; it will also expand its hotel management business. Additionally, just prior to the sale, La Quinta will complete the CorePoint spinoff. CorePoint will emerge as the only pure-play, publicly traded REIT focused exclusively on select-service midscale and upper-midscale lodging. \u201cAs we anticipated, the separation of our businesses is enabling greater strategic clarity and allowing our company to take advantage of growth opportunities that naturally flow from each business model,\u201d<\/em> Keith Cline, president & CEO of La Quinta Holdings Inc., said in a prepared statement.<\/p>\n

La Quinta is accustomed to multi-billion-dollar offers. In 2006, the hotel company was acquired for $3.4 billion by The Blackstone Group, which took La Quinta public in 2014. Wyndham\u2019s acquisition of La Quinta is on track to close in the second quarter of 2018, immediately following the La Quinta spinoff.<\/p>\n

And the consolidation continues<\/strong><\/h2>\n

If activity in the hospitality sector in 2017 is any indication, the Wyndham-La Quinta deal may be the beginning of a busy year of M&As. Notable transactions in 2017 included RLJ Lodging Trust\u2019s completion of its $1.2 billion all-stock merger<\/a> with FelCor Lodging Trust Inc. In a joint venture, KSL Capital Partners LLC and Aspen Skiing Co., an affiliate of Henry Crown and Co., wrapped up their $1.5 billion acquisition of Intrawest Resorts Holdings Inc. Additionally, Best Western Hotels & Resorts Scandinavia bought Sweden Hotels, creating the largest hotel group in Scandinavia.<\/p>\n

\u201cThe attractive valuation multiple achieved in this transaction [involving La Quinta\u2019s sale to Wyndham] could cause other smaller or single-brand hotel companies to more seriously consider strategic alternatives to maximize value for shareholders,\u201d<\/em> Bellisario added. \u201cWe expect hotel brand M&A to continue, especially as the benefits of the \u2018bigger is better\u2019 thesis materialize.\u201d<\/em><\/p>\n

Image courtesy of La Quinta Holdings<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The transaction will expand Wyndham\u2019s hotel portfolio to 21 brands and more than 9,000 properties, and result in the spinoff of La Quinta\u2019s owned real estate assets into the newly formed CorePoint Lodging Inc., which will hold the distinction of being the only pure-play, publicly traded REIT focused exclusively on midscale and upper-midscale lodging.<\/p>\n","protected":false},"author":969,"featured_media":1004204532,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21743,21808,21751,21783,23891,21742],"tags":[32934,32791,34102,37593,33129,38919],"class_list":["post-1004204526","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-deals","category-featured","category-hotel","category-investment","category-national","category-latest","tag-barclays","tag-deutsche-bank","tag-felcor-lodging-trust","tag-la-quinta-inn-suites","tag-the-blackstone-group","tag-wyndham-worldwide"],"acf":[],"yoast_head":"\nWyndham to Buy La Quinta for $2B - 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