Chesapeake Lodging sold for $2.7 billion

Park Hotels & Resorts announces $2.7B acquisition of Chesapeake Lodging

Park Hotels buys Chesapeake Lodging, Stockwinners

Park Hotels & Resorts (PK) and Chesapeake Lodging Trust (CHSP) announced that they have entered into a definitive merger agreement under which Park will acquire all the outstanding shares of Chesapeake in a cash and stock transaction valued at approximately $2.7B.

Upon completion of the merger, the combined company will have an estimated enterprise value of $12B, firmly solidifying Park’s position as the second largest lodging REIT while also advancing the company’s strategic goals of portfolio enhancement and diversification.

The transaction has been approved by the board of directors and board of trustees of Park and Chesapeake, respectively.

Under the terms of the merger agreement, Chesapeake shareholders will receive $11.00 in cash and 0.628 of a share of Park common stock for each Chesapeake share.

The fixed exchange ratio represents an agreed upon price of $31.00 per share of Chesapeake shares of beneficial interest based on Park’s trailing 10-day volume weighted average price as of May 3.

Based on Park’s closing stock price on May 3, this represents $31.71 per share of aggregate value to Chesapeake shareholders and represents a premium of approximately 11% to Chesapeake’s trailing 10-day VWAP and approximately 8% to Chesapeake’s closing stock price on May 3.

Upon closing, Park stockholders and Chesapeake shareholders will own approximately 84% and 16% of the combined company, respectively.

The transaction is subject to customary closing conditions, including receipt of the approval of Chesapeake shareholders.

The companies currently expect the transaction to close in late third quarter or early fourth quarter.

Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States.

The Trust owns 20 hotels with an aggregate of 6,279 rooms in eight states and the District of Columbia.

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Wyndham acquires La Quinta hotel for $1.95B

Wyndham acquires La Quinta hotel for $1.95B

Wyndham acquires La Quinta hotel for $1.95B. Stockwinners.com
Wyndham acquires La Quinta hotel for $1.95B.

Wyndham Worldwide (WYN) and La Quinta (LQ) announced that they have entered into a definitive agreement under which Wyndham Worldwide will acquire La Quinta’s hotel franchise and hotel management businesses for $1.95B in cash.

The acquisition is expected to close in Q2 of 2018.

Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash, approximately $1.0 billion in aggregate, and Wyndham Worldwide will repay approximately $715 million of La Quinta 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 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. 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.

The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong midscale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests.

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.

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.

La Quinta also announced today that Keith A. Cline has been appointed President and Chief Executive Officer of CorePoint Lodging effective upon completion of the planned spin-off.

Wyndham Worldwide’s planned spin-off of Wyndham Hotel Group remains on track for an expected distribution in the second quarter of 2018.

LQ closed at $19.45. WYN closed at $117.13.


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