Hilton plans REIT, timeshare spinoffs

Conglomerate valued at $20 billion with announcement of new publicly-traded funds

TRD New York /
Feb.February 26, 2016 04:00 PM

Hotel giant Hilton Worldwide Holdings plans to spin off its timeshares and most of its real estate businesses in a move that could bring tax savings and lift stocks.

After the move was announced Friday morning, its shares rose 6.1 percent before falling again to 1.9 percent, valuing the company at $20 billion.

About 70 of the hotel conglomerate’s hotel properties — most of those in the U.S. — will be spun off into a publicly-traded real estate investment trust, the New York Times reported.

Under the DoubleTree and eponymous Hilton banners, the hospitality firm owns or leases 146 hotels around the world, worth an estimated $13.5 billion, Bloomberg reported. The news service reported that 10 of the hotels generate half of the group’s pretax earnings, and eight of the most valuable 10 would be folded into the new REIT.

Hilton Grand Vacations, the firm’s timeshare business, will turn into a separate publicly-traded company. The new timeshare firm, with roughly 50 properties in Europe and the U.S., will have a long-term license agreement with Hilton Worldwide to market, run and sell resorts under the brand, Hilton Grand Vacations, the Times reported.

David Loeb, an analyst with Robert W. Baird & Co. estimated that the timeshare company would be valued at roughly $2.1 billion.

Hilton sought Internal Revenue Service approval before announcing the move. Both the REIT and the timeshare spinoffs are expected to be completed by the end of the year, and do not require a shareholder vote, the Times reported.

The Blackstone Group, which took Hilton public in 2013, owns a 46 percent share in the lodging company.

In its fourth quarter financial results, Hilton reported an adjusted profit of 22 cents per share on revenue of over $2.8 billion, according to the Times. [NYT] and Bloomberg]Dusica Sue Malesevic


Related Articles

arrow_forward_ios
Optera Capital's Glenn Alba, AWH Partners' Russ Flicker and a rendering of 88 Schermerhorn Street

Downtown Brooklyn is getting another Hilton

From left: Hilton Worldwide Holdings CEO Christopher Nassetta, the Waldorf Astoria at 301 Park Avenue, and China President Xi Jinping (Credit: Getty Images)

Hilton chief talks China, the Waldorf Astoria and tipping at NYU hospitality conference

Chicago resi broker will have a different kind of deal to close on “The Bachelorette”

Chicago resi broker will have a different kind of deal to close on “The Bachelorette”

Ashford picks up Midtown hotel for $195M

Ashford picks up Midtown hotel for $195M

Calling all agents: Reality show casts wide net for “beach junkie realtors”

Calling all agents: Reality show casts wide net for “beach junkie realtors”

Apollo aims for $1B for third real estate fund

Apollo aims for $1B for third real estate fund

VEREIT pays $85M to settle accounting scandal class-action suits

VEREIT pays $85M to settle accounting scandal class-action suits

AIG is trying to sell this Midtown hotel for more than $200M

AIG is trying to sell this Midtown hotel for more than $200M

arrow_forward_ios