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Wyndham Worldwide Gets Approval for Hotel Business Spinoff

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Wyndham Worldwide Corporation’s board of directors has given green signal for the earlier announced spinoff of its hotel business – Wyndham Hotel Group – resulting in two separate publicly traded companies. Wyndham Worldwide will be rechristened Wyndham Destinations, Inc.

After the spinoff, Wyndham Hotels & Resorts will trade under the symbol “WH” on the New York Stock Exchange (NYSE), whereas Wyndham Destinations will keep trading on NYSE platform under the new ticker “WYND”. Wyndham Hotels & Resorts is likely to begin “regular-way” trading on June 1, 2018.

Per Wyndham Worldwide, the spinoff of its Hotel Group business and the combination of Vacation Ownership segment with RCI is the best structure to unlock shareholder value and enable strong long-term growth across the businesses. Moreover, this latest move is expected to increase the fit, focus, and strategic flexibility of the post spin-off companies, facilitate prospective capital raising and position the companies to better respond to developments in their respective markets., Following the separation, the companies are also likely to enjoy significant scale and leadership positions within their industries coupled with strong cash flows.

Separately, the Wyndham Worldwide announced that it has completed the sale of its European vacation rentals business to an affiliate of Platinum Equity for $1.3 billion. The European vacation rentals business controls significant numbers of local brands, which comprises of cottages.com, James Villa Holidays, Landal GreenParks, Novasol and Hoseasons. Post divestiture, this division will pay 1% of its net revenues — as a royalty fee for 20 years — for the right to use the ‘by Wyndham Vacation Rentals’ endorser brand. Wyndham Worldwide will use the proceeds for the repayment of its debt.

 

Price Performance

In a year’s time, shares of this Zacks Rank #3 (Hold) company rallied 15.2% compared with the industry’s gain of 23.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Also, Hyatt Hotels Corporation (H - Free Report) , Hilton Worldwide Holdings Inc. (HLT - Free Report) and Marriott International, Inc. (MAR - Free Report) have witnessed a gain of 39.2%, 33.2% and 34.1%, respectively, in the past year.

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