|
 |  Wall Street Journal -
Nov-05-2009Hyatt Moves Up Its IPO(topic overview)
CONTENTS:
SOURCES
FIND OUT MORE ON THIS SUBJECT
Hyatt, which was originally set to launch a $988 million deal for trading on Friday, is instead aiming for Thursday, with one analyst conjecturing that the hotel chain was trying to get the deal done ahead of the government's release of unemployment data Friday. Hyatt's offering of 38 million shares priced at $25 a share Wednesday, within its expected price range of $23 to $26. [1] CHICAGO — There's talk of infighting among its founder's heirs and a sluggish appetite for hotel reservations around the globe. Hyatt Hotels Corp. shares are set to begin trading Thursday now that the company raised $950 million in its initial public offering.[2] NEW YORK, Nov 4 (Reuters) - Shares of Hyatt Hotels Corp will price on Wednesday and are set to start trading on Nov. 5, a day earlier than previously planned, according to some of the company's underwriters. The company had earlier intended for the pricing of shares for its initial public offering to take place Thursday and for the shares to start trading Nov. 6.[3]
The IPO market showed signs of unease, with one company postponing its deal and Hyatt Hotel Corp. moving its debut one day earlier. Regional bank PlainsCapital Corp., which was scheduled to price its initial public offering Wednesday night and begin trading Thursday, postponed the deal because of market conditions.[1]
Nov. 4--The pricing for Hyatt Hotels Corp.' s initial public offering, originally scheduled for Thursday, has been moved to today, according to IPO analyst Scott Sweet at IPO Boutique.[4]
The company's initial public offering of 38 million Class A shares would raise between $874 million and $988 million. The IPO's underwriters could choose to exercise their option to buy an additional 5.7 million shares.[4] Hyatt's most recent prospectus for the offering estimated a price of between $23 and $26 per share in an offering of 38 million shares.[4] Hyatt plans to sell 38 million shares for between $23 and $26 each under the ticker "H" ( H.N ) on the New York Stock Exchange.[3] Hyatt shares will start trading on Thursday under the ticker "H" ( H.N ) on the New York Stock Exchange. Chicago-based Hyatt had said it would sell its shares for between $23 and $26 each.[5]
Public trading under the symbol H is expected to begin on the New York Stock Exchange Thursday.[4]
Hyatt plans to trade on the New York Stock Exchange under the symbol H. Goldman Sachs (GS) is lead underwriter of the deal.[6]
The offering is structured so the Pritzker family would own 80 percent of Hyatt's Class B common stock, each share of which has 10 times the voting power of a Class A common share. [4] The family also has feuded over how Thomas Pritzker administered various family trusts and the dual class structure of Hyatt stock, which gives the family 10 votes per share.[2]
The proceeds of the IPO would go to the Pritzker family, which controls the company. If the IPO's underwriters, led by Goldman Sachs ( GS.N ), along with Deutsche Bank Securities ( DBKGn.DE ) and J.P. Morgan Securities ( JPM.N ) choose to exercise an option to buy another 5.7 million shares, those proceeds will go to Hyatt.[5] The full proceeds of the $931 million IPO will go to the Pritzker family, which controls the company.[3]
"Disputes. among Pritzker family members and the trustees of the Pritzker family trusts may result in significant distractions to our management, disrupt our business, have a negative effect on the trading price of our. common stock," Hyatt cautioned in a regulatory filing last month outlining a series of risks faced by the company when it become publicly traded. Executives also noted any such problems could heap negative publicity on Hyatt and the family.[2] Among the issues facing the company are disputes between members of the wealthy Pritzker family, the largest holders of Hyatt stock with an 85 percent stake in the Chicago company.[2]
Hyatt Hotels ( H ), a global upscale hotel operator and developer owned by the Pritzker family, is expected to go public this week.[7]
Hyatt's financial results have slumped during the economic downturn, with occupancy and room rates down throughout the hotel industry. Hyatt declined to comment, citing the quiet period surrounding its IPO. PlainsCapital is the second U.S. IPO in the past seven days to cite market conditions while halting its plans; last week, energy company AEI withdrew its offering after it cut its price and size in a bid to attract more investors. Though PlainsCapital had seen its provisions for loan losses climb in the past two years as the economy deteriorated, in the first three quarters of 2009 its net income rose on increased income from its mortgage unit, which was doing more refinancings and originations.[1] Discounts have helped occupancy stabilize, but profit, revenue and a key performance measure of revenue for each available room is down dramatically at the biggest chains. Hyatt said its revenue per available room sank 22 percent for the first nine months of the year while overall revenue fell 17 percent to $2.44 billion for the period ending Sept. 30. Its nine-month loss was $31 million, compared with a profit of $310 million last year.[2] Net profit for the company's fiscal first quarter, which ended Sept. 30, increased 11 percent to $571 million, or 22 cents per share.[8] Cisco said net income was down 19 percent from the year-ago period to $1.8 billion, or 30 cents per share. LOS ANGELES -- Media conglomerate News Corp. said its net income for its most recent quarter grew despite analysts' expectations of a decline, thanks to strength at its cable networks and movies unit and an improving market for local television ads.[8]
Hyatt will likely price within its estimated range of $23 to $26, Sweet said. Earlier, he forecast a price of $21 a share, but he lifted his outlook on healthy interest now expected for the deal. [6] With 38 million shares in the deal, Hyatt will raise about $931 million if it prices at $24.50 a share.[6]
Questions had lingered about whether investors would be confident enough to snatch up the 38 million shares -- priced at $25 each, near the top end of the $23 to $26 range -- that were offered.[8] Proceeds from the sale — which was priced late Wednesday at $25 each, near the top end of the $23 to $26 range — will go almost entirely to the family, who will remain in control of the company with about two-thirds of outstanding shares and three-quarters of the shareholder voting power.[2]
Questions had lingered about whether investors would feel confident enough to snatch up the 38 million shares of the iconic hotel chain that were offered. [2] Expenses for owned and leased hotels decreased by $118 million in the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.[7] Consolidated revenues in the nine months ended September 30, 2009 decreased $508 million, or 17%, compared to the nine months ended September 30, 2008, including $60 million in net unfavorable currency effects and a $73 million decrease in other revenues from managed properties.[7] Selling, general and administrative costs decreased by $5 million in the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.[7]
The decrease was driven primarily by $149 million of cost reductions at comparable owned and leased hotels primarily attributable to reductions in compensation-related costs and other variable operating expenses, as we reduced our costs in response to declining hotel revenues.[7] Two of Hyatt's rivals -- Marriott International ( MAR.N ) ( MAR.N ) and Starwood Hotels & Resorts ( HOT.N ) -- have forecast revenue per available room declines of as much as 5 percent in 2010, suggesting that the U.S. hotel industry will not quickly rebound from the current recession.[5] Hyatt's revenue for the first half of 2009 declined 18.5 percent from a year earlier, reflecting sluggish demand for hotels, especially from the corporate sector.[5]
Hyatt was founded in 1957 by Jay Pritzker and first taken public in 1962, but has been privately held for more than 25 years. It owns, operates, manages or franchises 415 Hyatt-branded properties, including the Hyatt, Park Hyatt, Hyatt Regency and Grand Hyatt chains, in 45 countries.[2]
We have over 5,000 contributors, over 100,000 articles, and over 11 million visitors annually. This website and its affiliates have no responsibility for the views, opinions and information communicated here. The contributor(s) and news providers are fully responsible for their content. The views and opinions expressed here are not necessarily those of the American Chronicle or its affiliates. All services and information provided on this website are provided as general information only. Any medical advice, home remedies and all other medical information on this website should not be treated as a substitute for the medical advice of your own doctor. We are not responsible for any diagnosis of treatment made by anyone based on any of the content of this website. [4] To compensate, companies — particularly high-end hotels whose rooms used to command top dollar — are slashing prices and offering amenities to woo guests.[2]
SOURCES
1. Hyatt Moves Up Its IPO - WSJ.com
2. The Associated Press: Hyatt Hotels raises $950 million in IPO
3. UPDATE 1-Hyatt Hotels IPO pricing moved up - underwriters | Deals | IPOs | Reuters
4. American Chronicle | BRIEF: Hyatt to price IPO today
5. UPDATE 1-Hyatt Hotels IPO priced at $25 per share | Deals | IPOs | Reuters
6. CORRECT: Hyatt Hotels IPO On Deck For Thursday - Analyst
7. Hyatt Hotels Hopes Investors Find IPO Inviting -- Seeking Alpha
8. Hyatt IPO raises $950M; Cisco earnings sign of 'tipping point,' CEO says
GENERATE A MULTI-SOURCE SUMMARY ON ANY SUBJECT
Enter your search query below. WAIT 10-20 sec for the new window to open.
Get more info on Hyatt Moves Up Its IPO by using the iResearch Reporter tool from Power Text Solutions.
 |
|  |
|
