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MARRIOTT TO BECOME TWO COMPANIES THROUGH SPECIAL DIVIDEND

 MARRIOTT TO BECOME TWO COMPANIES THROUGH SPECIAL DIVIDEND
 WASHINGTON, Oct. 5 /PRNewswire/ -- Marriott Corporation (NYSE: MHS) announced today a plan to divide, through a special dividend, its present operations into two separate companies. One will include Marriott's lodging, food and facilities management and senior living service operations, and will be named Marriott International, Inc. The other will include Marriott's real estate properties as well as its airport and tollroad concessions, and will be named Host Marriott Corporation.
 Under the plan, after a special dividend, shareholders will have one share in a new company -- Marriott International, Inc. -- in addition to each share they hold in Marriott Corporation. Marriott Corporation then will be renamed Host Marriott Corporation. Plans call for shares of both companies to be listed on the New York Stock Exchange.
 The transaction is conditioned upon, among other things: declaration of the special dividend by Marriott Corporation's board of directors, ratification of the special dividend by a majority of Marriott shareholders, and receipt of an affirmative ruling from the Internal Revenue Service that the special dividend will be tax-free to shareholders. It is expected that the dividend will be distributed in mid-1993 once these conditions are met.
 J.W. Marriott, Jr., chairman and president of Marriott Corporation, said, "The division into two different companies will enable us to advance our longstanding strategy of separating ownership of properties from management of operations.
 "The transaction will permit Marriott International to focus its efforts on expansion of management businesses where individual opportunities require relatively small amounts of capital. Host Marriott will retain substantial fixed assets for longer-term opportunities in capital-intensive businesses -- real estate, and airport and tollroad concessions," he explained.
 "Under this plan, we seek to enable shareholders to realize the inherent value of our management businesses more quickly while also giving them the potential over time to benefit from an upturn in real estate values," Mr. Marriott said. "Shareholders can choose to pursue investment goals in either or both companies rather than in one combined organization."
 Mr. Marriott said that in the lodging business Marriott International and Host Marriott will have an ongoing relationship, similar in many ways to the relationship between Marriott Corporation and other owners of hotel properties now operated by Marriott. Host Marriott will own 19 percent of the approximately 131,000 Marriott- managed hotel rooms.
 The Marriott chairman added, "This transaction will not affect our customers. Both companies will remain dedicated to the high standards of quality and value for which Marriott is well known and widely respected.
 "Our day-to-day operations will not be affected by this transaction. During the past few years, we have aggressively brought staffing levels and expenses in line with business conditions. We will continue to improve efficiency where possible, but this transaction should not result in work force reductions," he explained. "Our employees will continue to have attractive career development opportunities due to the strong profiles and prospects of both companies."
 The two companies will be run by separate management teams. J.W. Marriott, Jr. will be chairman, president and chief executive officer of Marriott International, Inc. William J. Shaw, a Marriott Corporation executive vice president and president of the company's Service Group, will be responsible for food and facilities management, senior living services and food distribution businesses in Marriott International. William R. Tiefel, a Marriott Corporation executive vice president and president of the company's Lodging Group, will be responsible for Marriott International's lodging management, franchising and timeshare operations.
 Host Marriott Corporation will be headed by Richard E. Marriott as chairman, and Stephen F. Bollenbach as president and chief executive officer. Richard Marriott, brother of J.W. Marriott, Jr., is now vice chairman of Marriott Corporation. Mr. Bollenbach is its chief financial officer and an executive vice president.
 After the special dividend, the Marriott family will hold approximately 25 percent ownership interest in both companies. The companies will have separate boards of directors, except for the two Marriott brothers, who will serve on both boards.
 Once the transaction is completed, Marriott International will have operations in 50 states and 19 countries, and approximately 182,000 employees. It will have little long-term debt. On a pro forma basis, if it had been a separate company in 1991, it would have had annual sales of approximately $7.4 billion and operating cash flow (before interest expense and taxes) of nearly $500 million.
 When the transaction is completed, Host Marriott will have operations or properties in 34 states and six countries, with approximately 23,000 employees. On a pro forma basis, as a separate company Host Marriott would have had sales of approximately $1.7 billion in 1991, and 1991 operating cash flow (before interest expense and taxes) of over $350 million.
 Marriott International will include the following parts of Marriott Corporation:
 -- Lodging Group--Marriott Hotels, Resorts and Suites, which manages or franchises 243 full-service hotels; Courtyard, the company's moderate price lodging division, which now manages or franchises 202 hotels; Residence Inn, the extended stay leader, which now manages or franchises 178 hotels; Fairfield Inn, Marriott's economy lodging division, which now manages or franchises 114 hotels; and Marriott Ownership Resorts, which now operates 20 timeshare properties. The number of hotel rooms now managed or franchised by the lodging group totals over 160,000.
 -- Service Group--Marriott Management Services, which provides food and facilities management for nearly 3,000 clients in health care, business, schools and higher education; Marriott Senior Living Services, which now operates 16 retirement communities that provide independent and assisted living and health care for older Americans; and Marriott Distribution Services, which distributes food and related products to company operations and outside clients.
 Host Marriott Corporation will include Host/Travel Plazas, the leading operator of airport and tollroad food, beverage and merchandise concessions,
recently expanded by the acquisition of Dobbs airport operations. Host/Travel Plazas now serves 68 airports, primarily in the United States, and operates over 100 food and merchandise units on 14 U.S. tollroads, as well as concessions at several stadiums and arenas.
 Host Marriott also will own 141 Marriott lodging properties and 16 retirement communities, located in 31 states and four countries, to be managed under long-term agreements by Marriott International. Over time, these properties may be retained, refinanced or sold to outside investors, with management contracts held by Marriott International. Host Marriott will retain most of Marriott Corporation's long-term debt obligations, and Host Marriott or its subsidiaries will act as general or limited partners in a number of Marriott lodging partnerships. Host Marriott, under certain conditions, will have access to up to $600 million from Marriott International under a revolving line of credit through December 1997.
 James D. Wolfensohn Incorporated; Merrill Lynch, & Co.; Houlihan, Lokey, Howard & Zukin, Inc.; and Latham & Watkins are acting as advisors to Marriott Corporation on the proposed transaction.
 -0- 10/5/92
 /CONTACT: Marriott corporate relations, 301-380-7770/
 (MHS) CO: Marriott Corporation ST: District of Columbia IN: LEI SU: DIV


TS -- NY015 -- 6391 10/05/92 08:03 EDT
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Date:Oct 5, 1992
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