Wyndham Hotel group will acquire La Quinta hotels for $1.95 billion.
La Quinta has about 900 locations ranging from upscale to economy hotels. Wyndham will now control 21 different hotel brands including Ramada, Days Inn and Super 8 budget lodgings.
According to CNBC. La Quinta shareholders will receive $8.40 per share in cash and Wyndham will repay about $715 million of La Quinta debt net of cash. La Quinta will also spin off its real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging Inc.
Wyndham said in a press release it will set aside a reserve of $240 million for estimated taxes as part of La Quinta’s spin-off of its real estate assets. La Quinta has a market capitalization of about $2.28 billion.
Shares in both companies rose after the announcement.
