Hilton Worldwide on Thursday said its board of directors approved its plans to spin off its real estate and timeshare businesses into standalone companies named Park Hotels & Resorts and Hilton Grand Vacations. The new companies are expected to start trading on a yet-to-be-named public market by the end of this year, according to a filing with the U.S. Securities and Exchange Commission.
Hilton shareholders would receive shares in all three companies once the transaction is finalized.
“We expect to unlock growth opportunities that are embedded within the three businesses and take advantage of capital market and tax efficiencies,” Hilton President and CEO Chris Nassetta said in a statement.
Park Hotels & Resorts would include 69 hotels and resorts (the second-largest publicly traded REIT in the hotel industry) and will be led by Thomas Baltimore Jr., former chief executive of RLJ Lodging Trust.
Park Hotels & Resorts will have earnings before interest, taxes, depreciation and amortization of as much as US$825 million in 2016, Hilton said. In 2015, the unit had adjusted EBITDA of US$817 million.
Hilton Grand Vacations would be headquartered in Orlando, Florida, and include 46 resorts. Mark Wang, who has led Hilton’s global timeshare operations since 2008, will serve as the company’s chief executive. Hilton added that it plans to convert 125 rooms at the Embassy Suites Washington D.C. into timeshare units.