Wyndham Worldwide Takes Position As Pure Hotel Play

PARSIPPANY, NJ— Marked by the usual pomp and circumstance that surrounds companies’ debuts on the New York Stock Exchange— the ringing of the bell and the execution of the company’s first trade on the NYSE floor— Wyndham Worldwide Corp. made its public market premier recently following its spin-off from Cendant Corp., which is splitting its business into three separate companies and selling off a fourth. With this split finally behind it, Wyndham Worldwide is now firmly positioned among the ranks of the largest publicly-traded hospitality companies in the world and, as such, is now focused on enhancing shareholder value through a diverse mix of economy roadside motels, suburban midscale properties, upscale center-city hotels and vacation rental and ownership properties in major destination markets. “This is an exciting day that immediately establishes Wyndham Worldwide as a leading, pure-play hospitality business with a strong and diverse portfolio of global brands that are widely recognized by consumers, business travelers and partners,” asserted Stephen Holmes, who was previously the vice chairman of Cendant Corp. and is now the chairman, president and CEO of Wyndham Worldwide. As of press time, Wyndham Worldwide began trading at $33.45 per share. It entered the market with 200 million shares outstanding. The total market capitalization was approximately $6.7 billion. Selling under the symbol “WYN,” Wyndham Worldwide effectively takes the place of the former Cendant Hotel Group. The new company’s business segments include the new RCI Global Vacation Network, a vacation exchange and rental business; Wyndham Vacation Ownership, Inc., the timeshare development business featuring Fairfield Resorts and Trendwest Resorts; and the Wyndham Hotel Group, which includes hotel brands Super 8, Days Inn, Ramada, Travelodge, Howard Johnson, Wingate Inn, AmeriHost Inn, Wyndham Hotels and Resorts, Baymont Inn & Suites and Knights Inn. Advising Wyndham Worldwide in its public offering were JP Morgan Chase, Citigroup and Evercore. Furthermore, prior to the NYSE listing, there was a distribution of all Wyndham Worldwide common shares to Cendant shareholders at a ratio of one Wyndham Worldwide share for every five Cendant shares held as of July 21. Assisting Holmes in leading Wyndham Worldwide is Virginia Wilson, the company’s executive vp and CFO; Steven Rudnitsky, the president and CEO of Wyndham Hotel Group; Franz Hanning, the president and CEO of Wyndham Vacation Ownership; and Kenneth May, the president and CEO of RCI. When asked why the Cendant spin-off was necessary, Holmes explained to HOTEL BUSINESS®, “The most efficient way to deliver value to shareholders was to spin-off the businesses in hopes that the separate businesses will trade at higher values than they would if they were part of the Cendant conglomerate.” In the case of Wyndham Worldwide, Holmes was at least initially correct since Cendant was trading at about $15.03 per share prior to the spin-off completion. Following the spin-off, Cendant was trading at $2.22. “The public market gives you a lot of flexibility and access to capital, including both debt and equity, to grow your business,” Holmes added. “It gives you a public presence in the marketplace, which helps relationships with business partners and franchisees. It makes you much more of an open company to our customers, which include our franchisees, developers as well as the general market.” Prior to the spin-off, Soleil Securities rated Wyndham Worldwide as a “buy.” JP Morgan, meanwhile, was “neutral” in its rating stance. Also spinning off from Cendant was the newly named Realogy, which consists of such businesses as Century 21, Coldwell Banker, ERA and Sotheby International Realty. The third spin-off firm will be Avis Budget Car Rental, LLC, the vehicle rental business. The fourth component, Travelport, which consists of such businesses as Orbitz and CheapTickets, is being sold to the Blackstone Group for $4.3 billion. Holmes also noted that the newly spun off companies will now attempt to consolidate from four office buildings down to two in Parsippany.