Hilton Worldwide announces intention to spin off Real Estate and Timeshare businesses
Hilton Worldwide 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 transaction will result in three, fully activated, pure-play companies and simplifies and focuses Hilton Worldwide's business model on its core fee business
Christopher J. Nassetta, president & CEO of Hilton Worldwide said:
"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. We intend to have the appropriate leadership, strategies and capital structures in place to set up all three companies for further success."
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.
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.