by Michael J. Shapiro | January 18, 2018
Wyndham Worldwide will acquire La Quinta Inns & Suites' hotel franchise and management business for $1.95 billion in cash, the lodging companies agreed to today. The deal is expected to close in the second quarter of this year.
Before the acquisition is completed, La Quinta will spin off its owned real-estate assets into a publicly traded real-estate investment trust called CorePoint Lodging. Once finalized, La Quinta stockholders will receive $8.40 per share and Wyndham will repay about $715 million in La Quinta debt, plus the estimated taxes incurred on the REIT spinoff.
The midscale La Quinta brand currently has nearly 900 managed and franchised hotels in its portfolio. Once the purchase is finalized, Wyndham Hotel Group will have 21 brands under its umbrella, and more than 9,000 hotels in more than 75 countries. The La Quinta Returns loyalty program, which has about 13 million members, will eventually join Wyndham Rewards' 53 million members.
"La Quinta will immediately become one of our flagship brands," said Geoff Ballotti, president and CEO 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. This acquisition also significantly expands our hotel-management business and provides us with substantial new opportunities to drive increased growth in our business."
La Quinta president and CEO Keith A. Cline will become president and CEO of CorePoint lodging once the spinoff is complete. "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," noted Cline.
Wyndham Worldwide's planned spinoff of Wyndham Hotel Group is still on track as well, and also is expected to occur in the second quarter of this year.