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Wyndham Worldwide to acquire La Quinta Holdings Hotel franchise and management business

La Quinta to become one of Wyndham’s flagship brands

Monday, January 22, 2018, 18:00 Hrs  [IST]
HBI Staff| New Delhi

Wyndham Worldwide Corporation has signed a definitive agreement with La Quinta Holdings to acquire their hotel franchise and hotel management businesses for USD 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 USD 8.40 per share in cash (approximately USD 1.0 billion in aggregate), and Wyndham Worldwide will repay approximately USD 715 million of La Quinta debt net of cash and set aside a reserve of USD 240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging Inc. 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. 

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.

Wyndham’s Hotel Group is the world’s largest and most diverse 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 and build upon strong midscale presence to expand its reach further into the fast-growing upper-midscale segment. 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 P. Holmes, Chairman and Chief Executive Officer 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.” 

“La Quinta will immediately become one of our flagship brands,” said Geoff Ballotti, President and Chief Executive Officer of Wyndham Hotel Group. “It is an exceptionally strong brand that is led by service- minded associates who deliver some of the highest customer engagement levels in our industry. We expect that La Quinta guests and franchisees will benefit from our intense focus on product quality and our best-in-class technology, digital, loyalty and distribution platforms. This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business.”

 
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