AT THE CLOSE of business on Thursday, May 31, Wyndham Worldwide Corp. will no longer exist, and a new hotel company will be born.
The corporation’s board of directors on May 9 unanimously agreed to the spinoff of Wyndham Hotel Group, a subsidiary, into Wyndham Hotels & Resorts Inc. Beginning Friday, June 1, the hotel company trades on the New York Stock Exchange under the ticker WH.
“Wyndham Hotels will be a new, publicly traded hotel franchising and management company with a portfolio of renowned brands,” said Stephen Holmes, CEO of Wyndham Worldwide, in a May 9 letter to stockholders, who will benefit from a 2-for-1 stock split that was scheduled to occur on May 18. The distribution date of the stock is May 31, at which time the spin-off will be complete, said the company in filings with the SEC.
“Wyndham Hotels is the global leader in the economy segment of the hotel industry and has a substantial and growing presence in the midscale and upscale segments,” Holmes writes.
In another May 9 letter, Geoffrey A. Ballotti, president and CEO of Wyndham Hotel Group and the soon-to-be Wyndham Hotels & Resorts, welcomed shareholders to the new company. “Our business model is asset-light and easily adaptable to changing economic environments due to low operating cost structures, which, together with our recurring fee streams and limited capital expenditures, yield attractive margins and predictable cash flows.”
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Also separating as a pure-play publicly traded company is Wyndham Worldwide’s timeshare business. The new company is Wyndham Destinations Inc., a developer and marketer of vacation-ownership products and a vacation-exchange company.
“We believe the spin-off is in the best interests of Wyndham Worldwide, its stockholders and other constituents,” Holmes said, “as it will result in two publicly traded companies, each with increased strategic flexibility and an enhanced ability to maintain its focus on its core business and growth opportunities, facilitate future capital raising as needed, and make the changes necessary to respond to developments in its respective markets.”
Upon completion of the spin-off, the stockholders of Wyndham Worldwide will receive one share of Wyndham Hotel stock for every share of Wyndham Worldwide stock they own.
Holmes said shareholder approval is not required to complete the spin-off or the stock split. “Immediately following the spin-off, you will own common stock in Wyndham Destinations and Wyndham Hotels.” Wyndham Destination will trade on NYSE under the symbol WYND.
Besides appointing Ballotti to lead the new Wyndham Hotels & Resorts, the board of directors also named the following top executives: David B. Wyshner, chief financial officer; Robert D. Loewen, chief operating officer; Mary R. Falvey, chief administrative officer; and Thomas H. Barber, chief strategy and development officer.
On May 30, Wyndham Hotels & Resorts is expected to close on its $1.95 billion acquisition of La Quinta Holdings Inc.’s franchise and management business, giving it more than 900 franchised hotels, mostly in the upper midscale segment. Rajiv Trivedi is to be president of the brand under Wyndham Hotels’ ownership. He is currently executive vice president and chief development officer at La Quinta.
On May 14, Wyndham Hotel Group sold its Knights Inn brand to Red Lion Hotels Corp. for $27 million.
Editor’s note: Last week, Asian Hospitality incorrectly reported the split was to occur on Friday, May 18.