PHOTO: The Hilton Los Cabos. (Photo courtesy of Hilton Worldwide)
Hilton Worldwide has taken a major step forward in its ongoing effort to separate into three publicly traded companies.
Hilton, which received the green light from its board of directors, announced Thursday that Form 10 registration statements have been filed with the U.S. Securities and Exchange Commission (SEC) for both its timeshare business and the bulk of its real estate business.
The separate real estate investment trust (REIT) will be named Park Hotels & Resorts and currently boasts a portfolio of 69 premium-branded hotels and resorts, with a majority located in the U.S.
The McLean, Virginia-based company's timeshare business, Hilton Grand Vacations, will also be spun off. The timeshare business manages 46 club resorts in the U.S. and Europe.
Once the transactions are complete, which is expected to occur by the end of the year, Hilton shareholders will own shares in all three separate companies.
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In April, Hilton announced that Thomas Baltimore will serve as CEO of the newly-named Park Hotels & Resorts, which will also be headquartered in McLean.
Hilton Grand Vacations will be based out of Orlando, Florida and led by chief executive Mark Wang.
In spinning off its businesses into separate publicly traded companies, Hilton will look to cut costs in taxes. Hilton's timing is notable as well considering the company just narrowly beat out recently passed legislation prohibiting similar deals.
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"The filing of the Form 10 Registration Statements is an important milestone in simplifying Hilton to a capital-light, fee-based business, while fully activating our real estate and timeshare businesses as standalone companies," said Hilton President and CEO Christopher Nassetta in a statement. "As a result of the proposed transactions, we expect to unlock growth opportunities that are embedded within the three businesses and take advantage of capital market and tax efficiencies."
"We look forward to completing the spins later this year, realizing significant benefits for all three companies and continuing to generate long-term value for Hilton shareholders."
In addition to Form 10 registration statement approval, the transactions are subject to several other conditions. However they do not require Hilton shareholder approval.
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