PARSIPPANY, NJ—Wyndham Worldwide Corp. said Thursday it would acquire La Quinta Holdings' hotel franchise and hotel management businesses for $1.95 billion in cash. The acquisition is expected to close in the second quarter.
In connection with the acquisition, La Quinta will spin off its 315 owned assets into a publicly traded REIT, CorePoint Lodging. Keith Cline, currently CEO of La Quinta, has been named president and CEO of CorePoint, an appointment that will take effect when the spin-off is complete.
Wyndham's chairman and CEO, Stephen Holmes, says the deal builds on his company'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 deal will add nearly 900 midscale locations flying the La Quinta flag to Wyndham's portfolio. At La Quinta, Cline says, “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.”
Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash, totaling approximately $1 billion in aggregate. Wyndham will repay approximately $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for the taxes stemming from the spin-off.
For Wyndham, Barclays is acting as exclusive financial advisor and Kirkland & Ellis LLP is acting as legal advisor. Barclays and Deutsche Bank are providing committed financing to Wyndham in connection with the transaction. J.P. Morgan is acting as exclusive financial advisor and Simpson Thacher & Bartlett LLP is acting as legal advisor to La Quinta, and J.P. Morgan is also providing committed financing to CorePoint in connection with the transaction.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
