Continuing its recent uptrend, shares of hotel operator and franchiser La Quinta Holdings (LQ 20.10, +0.65 +3.34%) trade modestly higher despite opening the session firmly in the green following this morning’s news that hotel peer Wyndham Worldwide (WYN 123.07, +5.94 +5.07%) had come to an agreement with LQ whereby the company would acquire LQ’s hotel franchise and hotel management businesses for $1.95 billion in cash and spin-off LQ’s real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging.
For its part, WYN will be acquiring managed and franchised hotels from LQ for the aforementioned $1.95 billion in a deal which is expected to close in Q2 of 2018.
Immediately prior to the sale of LQ to WYN, LQ will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging. Effective today, LQ also announced that Keith Cline has been appointed President and CEO of CorePoint Lodging effective upon completion of the planned spin-off.
Per the agreement, stockholders of LQ will receive $8.40 per share in cash (about $1.0 billion in aggregate), and WYN will repay about $715 million of LQ debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of LQ’s owned real estate assets into CorePoint Lodging Inc.
After the deal closes, WYN’s portfolio will boast franchised and managed hotels in 75 countries across 21 brands and more than 9,000 hotels.
During the past 12 months gains in shares of WYN have modestly outpaced LQ, up 59% and 39%, respectively.