“Our progress is active and nearing conclusion”, Aron told investors Wednesday afternoon. “Given the market’s dynamics and the hotel’s position, we concluded that near-term capital requirements would not represent a prudent additional investment for the Company”, Marcel Verbaas, president & CEO of Xenia Hotels & Resorts, said in prepared remarks.
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Starwood Hotels and Resorts reported a few positive third-quarter metrics and announced the edition of a new brand, but rumors from outside the company of a pending sale once again generated the most interest from analysts during the company’s quarterly earnings call.
“You’ll note that those are conflicting press reports”, Aron said. “And it really is not the time for us publicly to dissect the nuances of the processes or where we are in the processes because the minute we have news to share with you, we will share it with you”. As a result of the sale of the hotel, the company’s projected 2015 Adjusted EBITDA will be reduced by approximately $1.9 million. (NYSE:HOT) rose 9.13% or 6.26 points on Tuesday and made its way into the gainers of the day.
“Acquisitions are the best way for hotel groups to expand overseas as they enable the brand to be known to a larger group of consumers”.
According to Nomura Securities analyst Harry Curtis, Starwood could be bought at over $100 per share, which would value the company at more than $17 billion.
Shares in Starwood and Hyatt both opened trading sharply higher in the U.S. yesterday. “This will fill a special niche in Starwood’s portfolio, incorporating a handpicked collection of independently owned smaller properties committed to individuality, progressive design and cultural authenticity”. The entity will then merge with Interval Leisure Group’s Vistana business.
The company’s net income dipped 19.3 percent year over year to $88 million. The company has a market cap of $12,746 million.
Starwood signed 44 management and franchise contracts in the quarter, encompassing 8,600 rooms.
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Even though all three interested bidders declined to make any comment, their ambition for overseas expansion is quite evident.
