Hilton Worldwide Holdings have declared that they have now completed and filed their Form 10 Registration Statements for the spin-off of their business into 3 separate companies. We first reported on this back in March 2016, when Christopher Nassetta, Hilton’s Chief Executive Officer, outlined the main advantages of this restructure.
Christopher has now announced ‘The filling of the Form 10 Registration Statements is an important milestone in simplifying Hilton to a capital-light, fee-based business, while fully activating oour real estate and timeshare businesses as stand-alone companies. As a result of the proposed transactions, we expect to unlock growth opportunities that are embedded within the three businesses and take advantage of capital market and tax efficiencies. We look forward to completing the spins later this year, realizing significant benefits for all three companies and continuing to generate long-term value for Hilton shareholders.’
The three separate businesses are now coming into fruition. Hilton will continue to be predominantly fee based, around 90% of their total income comes from fees paid franchise and management fees. Hilton shareholder’s value is due to increase whilst Hilton also expects to continue a dividend pay-out ratio of 30% to 40%.
Park Hotels and Resorts will be the new name for the real estate business which is expected to focus on the long-term total returns. They plan to do this by augmenting the value of their exceptional properties. This new entity ‘Park’ will be run by Tom Baltimore (previously CEO of RLJ Lodging Trust) and Sean Dell’Orto (SVP & Treasurer of Hilton). Again, it is expected that earnings before tax is expected to increase, and it is expected to be the second largest publicly trading Real Investment Trust.
The final sector of the business ‘Hilton Grand Vacations’ (HGV) is a fast growing timeshare company. Their 46 resorts that hold 7402 units are in luxurious locations such as New York City, Orlando, Las Vegas and Hawaiian Islands. The 255,00 members can enjoy superior amenities and spacious condominiums with superior service. This sector will continue to be led by Mark Wang who has been successful in this position since 2008.
The Form 10 Registration Statements can be viewed on www.sec.gov, named Hilton Grand Vacations Inc for Timeshare spin-off and Park Hotels & Resorts Inc for the real estate business. Hiltons can be viewed at ir.hiltonworldwide.com/. The completion of this separation is looking positive for the end of 2016.
Posted on: June 2, 2016
For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 0203 519 3808 or email: info@TimeshareConsumerAssociation.org.uk