Wyndham Worldwide Corp. said its board approved the hotelier's planned spinoff of its Wyndham Hotels & Resorts Inc. unit into a stand-alone company.
The spinoff will be effected through a pro rata distribution of one Wyndham Hotels common share to Wyndham Worldwide stockholders for each Wyndham Worldwide common share they hold as of the record date of May 18 at 5 p.m. ET. Such distribution will take place after market close May 31.
Wyndham Worldwide shareholders will own 100% of Wyndham Hotels' common stock and will continue to own 100% of Wyndham Worldwide's common stock.
In line with the spinoff, Wyndham Worldwide will continue to operate as a vacation ownership and exchange company under the new name Wyndham Destinations Inc.
Once the spinoff closes, Wyndham Hotels will trade on the NYSE under the WH ticker, and Wyndham Destinations will trade under the new WYND ticker. Wyndham Destinations and Wyndham Hotels are set to start regular-way trading June 1, at which time regular-way trading in Wyndham Destination shares will reflect the completed distribution of Wyndham Hotels shares.
Additionally, Wyndham Hotels board authorized a $300 million share repurchase program, and Wyndham Destinations maintains roughly $1 billion under its current share buyback authorization.
Separately, Wyndham Worldwide said the roughly $1.3 billion divestment of its European vacation rentals business to an affiliate of global private equity firm Platinum Equity LLC has been finalized. Wyndham Worldwide aims to use the bulk of the net sale proceeds to trim its existing debt.
As part of the sale, the European vacation rentals business agreed to pay to Wyndham's hotel business a royalty fee of 1% of net revenue for the right to use the "by Wyndham Vacation Rentals" endorser brand for a period of 20 years. The European business will also serve as a redemption partner in the Wyndham Rewards loyalty program.
The European business has more than 110,000 units in more than 600 destinations worldwide and operates more than two dozen local brands, according to a release.
Broadridge Corporate Issuer Solutions Inc. will be the distribution agent, transfer agent and registrar for Wyndham Hotels shares.
Deutsche Bank and Goldman Sachs were the financial advisers to Wyndham Worldwide on the European vacation rentals business transaction, with Kirkland & Ellis International LLP and Dechert LLP serving as its legal advisers.