Hilton Worldwide Announces Intention to Spin off Real Estate and Timeshare Businesses
- Will result in three, fully activated, pure-play companies
- Intends to elect REIT status for the newly formed real estate company, making it one of the largest and most geographically diversified publicly traded lodging REITs |
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Hilton Worldwide Announces Intention to Spin off Real Estate and Timeshare Businesses
- Will result in three, fully activated, pure-play companies
- Intends to elect REIT status for the newly formed real estate company, making it one of the largest and most geographically diversified publicly traded lodging REITs |
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- Newly formed timeshare company would retain an exclusive, long-term affiliation with Hilton Worldwide
- Simplifies and focuses Hilton Worldwide’s business model on its core, capital efficient fee business
Hilton Worldwide (NYSE:HLT) today announced plans to enhance long-term shareholder value by spinning off the bulk of its real estate business into a publicly traded real estate investment trust (REIT) and by spinning off its timeshare business, Hilton Grand Vacations (HGV), as a separate publicly traded company.
“The transactions we announced today will result in three pure-play companies, enabling dedicated management teams to fully activate their respective businesses, taking advantage of both organic and inorganic growth opportunities as well as capital market and tax efficiencies,” said Christopher J. Nassetta, president & CEO of Hilton Worldwide. “We intend to have the appropriate leadership, strategies and capital structures in place to set up all three companies for further success.”
Additional Transaction DetailsHilton Worldwide has received a private letter ruling from the Internal Revenue Service on certain issues relevant to the qualification of the spin-offs as tax-free. These transactions will be effected through a distribution of the new entities’ stock to existing Hilton Worldwide shareholders. The intention is to file appropriate registration statements with the Securities and Exchange Commission (SEC) during the second quarter and to complete both spin-offs by the end of the year.
Hilton Worldwide intends to elect REIT status for the newly formed real estate company, which will include approximately 70 properties and 35,000 rooms, forming one of the largest and most geographically diversified publicly traded lodging REITs. The REIT will have a high quality portfolio of luxury and upper upscale assets, located across high-barrier-to-entry urban and convention markets, top resort destinations, select international regions and strategic airport locations.
Hilton Worldwide expects the newly formed timeshare company to manage nearly 50 club resorts in the United States and Europe and have an exclusive, long-term license agreement with Hilton Worldwide to market, sell and operate resorts under the Hilton Grand Vacations brand.
Hilton Worldwide will disclose more details of the proposed timeshare and real estate transactions upon the filing of appropriate registration statements with the SEC, including financial and other details. The transactions are subject to execution of intercompany agreements, arrangement of adequate financing facilities, the effectiveness of the registration statements, final approval by Hilton Worldwide’s Board of Directors and other customary conditions. The spin-off transactions will not require a shareholder vote. The spin-offs are expected to be completed by year-end but there can be no assurance regarding the ultimate timing of the spin-offs or that either or both of the spin-offs will ultimately occur.
Deutsche Bank Securities Inc. and Goldman, Sachs & Co. are acting as financial advisors to the Company.
Investor CallHilton will host its fourth quarter and full year 2015 financial results conference call at 10:00 a.m. Eastern Time today, February 26.
Participants may listen to the live webcast by logging onto the Hilton Worldwide Investor Relations website at http://ir.hiltonworldwide.com/events-and-presentations. A replay and transcript of the webcast will be available within 24 hours after the live event at http://ir.hiltonworldwide.com/financial-reporting/quarterly-results. Alternatively, participants may listen to the live call by dialing 1-888-317-6003 FREE in the United States or 1-412-317-6061 internationally with the Conference ID 0824669. Participants are encouraged to dial into the call or link to the webcast at least fifteen minutes prior to the scheduled start time. A telephone replay will be available for seven days following the call. To access the telephone replay, dial 1-877-344-7529 FREE or 1-412-317-0088 using the replay access code 10079673.
About Hilton WorldwideHilton Worldwide (NYSE:HLT) is a leading global hospitality company, comprised of more than 4,600 managed, franchised, owned and leased hotels and timeshare properties with more than 758,000 rooms in 100 countries and territories. For 96 years, Hilton Worldwide has been dedicated to continuing its tradition of providing exceptional guest experiences. The company's portfolio of 13 world-class global brands includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio - A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton, Home2 Suites by Hilton and Hilton Grand Vacations. The company also manages an award-winning customer loyalty program, Hilton HHonors. Hilton HHonors members who book directly through preferred Hilton channels have access to benefits including free standard Wi-Fi, as well as digital amenities that are available exclusively through the industry-leading Hilton HHonors app, where HHonors members can check-in, choose their room, and access their room using a Digital Key. Visit news.hiltonworldwide.com for more information and connect with Hilton Worldwide on Facebook, Twitter, YouTube, Flickr, LinkedIn and Instagram.
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