Wyndham Worldwide to acquire La Quinta for $1.95bn
Wyndham Worldwide will acquire La Quinta’s hotel franchise and hotel management businesses for $1.95 billion in cash.
The acquisition is expected to close in the second quarter of 2018.
Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash (approximately $1 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta debt.
The hotel giant will also set aside a reserve of $240 million for taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging.
Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging.
Wyndham’s is the world’s largest hotel business based on number of properties.
With the acquisition of La Quinta’s asset-light, fee-for-service business consisting of nearly 900 managed and franchised hotels, Wyndham Hotel Group will span 21 brands and over 9,000 hotels across more than 75 countries.
The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong mid-scale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests.
The La Quinta Returns loyalty program, with its 13 million enrolled members, will be combined with the award-winning Wyndham Rewards program, with its 53 million enrolled members.
Stephen Holmes, chief executive of Wyndham Worldwide, said: “This transaction builds on Wyndham Worldwide’s proven track record of acquiring companies that are a strong strategic and cultural fit, add highly-regarded brands to our portfolio and offer clear opportunities to drive shareholder value through growth, shared best practices and sharp execution.”
The transaction, which has been approved by the boards of directors of both companies, is expected to close upon the completion of the planned spin-off of La Quinta’s owned real estate assets into the separate entity.
Closing is subject to approval by La Quinta stockholders, regulatory and government approval and the satisfaction of other customary closing conditions.
Keith Cline, president, La Quinta, added: “As 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.
“To that end, we are excited to announce the addition of the La Quinta franchise and management businesses to Wyndham Hotel Group’s portfolio.
“We believe that, under the management of Wyndham’s seasoned team of executives, the La Quinta portfolio will grow and thrive, yielding long-term benefits to the stakeholders of both companies.”
La Quinta also announced today that Cline would been appointed president of CorePoint Lodging effective upon completion of the planned spin-off.
Wyndham Worldwide’s planned spin-off of Wyndham Hotel Group remains on track for an expected distribution in the second quarter of 2018.