Wyndham’s $1.95 Billion acquisition of La Quinta’s hotel franchise and hotel management businesses

Barclays is acting as exclusive financial advisor and Kirkland & Ellis LLP is acting as legal advisor to Wyndham Worldwide. Barclays and Deutsche Bank are providing committed financing to Wyndham Worldwide in connection with the transaction. J.P. Morgan is acting as exclusive financial advisor and Simpson Thacher & Bartlett LLP is acting as legal advisor to La Quinta. J.P. Morgan is providing committed financing to CorePoint Lodging in connection with the transaction.

Wyndham Worldwide Corporation (NYSE: WYN) and La Quinta Holdings Inc. (NYSE: LQ) have entered into a definitive agreement under which Wyndham Worldwide will acquire La Quinta’s hotel franchise and hotel management businesses for $1.95 billion in cash. The acquisition is expected to close in the second quarter 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 Kirkland team was led by corporate partners David Feirstein (Picture), Will Boothby and Carlo Zenkner as well as Daniel Wolf and David Fox; tax partners Dean Shulman and Sara Zablotney and associate Adam Kool; real estate partner Rob Miceli; and financing partner Ashley Gregory.

The Simpson Thacher team includes Eric Swedenburg (Picture), Ed Chung, Jakob Rendtorff, Erika Tang and Christine Turner (M&A); Edgar Lewandowski, Lia Toback, Amanda Weiss, Ben Heriaud and Jonathan Zane (Capital Markets); Sas Mehrara, Steven Stickler and Jason Mohr (Real Estate); John Hart, Drew Purcell and Brian Mendick (Tax); David Rubinsky, Jeannine McSweeney and Jason Fixelle (Executive Compensation and Employee Benefits); Brian Gluck and Leah Nudelman (Credit); Peter Guryan, Kelly Karapetyan, Ellen Frye and Daniel Owsley (Antitrust); Steve DeLott (Insurance); Lori Lesser and Kate Stein (IP); and Mike Isby (Environmental).

 

Involved fees earner: Eric Swedenburg – Simpson Thacher & Bartlett; Edward Chung – Simpson Thacher & Bartlett; Jakob Rendtorff – Simpson Thacher & Bartlett; Erika Tang – Simpson Thacher & Bartlett; Christine Turner – Simpson Thacher & Bartlett; Edgar Lewandowski – Simpson Thacher & Bartlett; Lia Toback – Simpson Thacher & Bartlett; Amanda Weiss – Simpson Thacher & Bartlett; Benjamin Heriaud – Simpson Thacher & Bartlett; Jonathan Zane – Simpson Thacher & Bartlett; Sasan Mehrara – Simpson Thacher & Bartlett; Steven Stickler – Simpson Thacher & Bartlett; Jason Mohr – Simpson Thacher & Bartlett; John Hart – Simpson Thacher & Bartlett; Andrew Purcell – Simpson Thacher & Bartlett; Brian Mendick – Simpson Thacher & Bartlett; David Rubinsky – Simpson Thacher & Bartlett; Jeannine McSweeney – Simpson Thacher & Bartlett; Jason Fixelle – Simpson Thacher & Bartlett; Brian Gluck – Simpson Thacher & Bartlett; Leah Nudelman – Simpson Thacher & Bartlett; Steven DeLott – Simpson Thacher & Bartlett; Peter Guryan – Simpson Thacher & Bartlett; Kelly Karapetyan – Simpson Thacher & Bartlett; Ellen Frye – Simpson Thacher & Bartlett; Daniel Owsley – Simpson Thacher & Bartlett; Lori Lesser – Simpson Thacher & Bartlett; Kate Stein – Simpson Thacher & Bartlett; Michael Isby – Simpson Thacher & Bartlett; David Feirstein – Kirkland & Ellis; Willard Boothby – Kirkland & Ellis; Carlo Zenkner – Kirkland & Ellis; Daniel Wolf – Kirkland & Ellis; David Fox – Kirkland & Ellis; Dean Shulman – Kirkland & Ellis; Sara Zablotney – Kirkland & Ellis; Adam Kool – Kirkland & Ellis; Roberto Miceli – Kirkland & Ellis; Ashley Gregory – Kirkland & Ellis;

Law Firms: Simpson Thacher & Bartlett; Kirkland & Ellis;

Clients: La Quinta Holdings Inc.; Wyndham Hotel Group;

 

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Author: Ambrogio Visconti