Hilton Grand Vacations Club at Borgo alle Vigne

Hilton board approves spinoff of timeshare arm

Hilton Worldwide Holdings’ board of directors has approved the the spinoff of timeshare business Hilton Grand Vacations (HGV) as part of the company’s proposed split into three separate entities.

In addition to the spinoff of HGV, which has resorts affiliated to RCI, the split will see the creation of another new company – HGV Park Hotels & Resorts, which will hold Hilton Worldwide’s portfolio of hotels and resorts. The remaining assets will be held by Hilton Worldwide.

The company said the changes would be implemented after the close of the market on 3 January 2017, with Park Hotels & Resorts and Hilton Grand Vacations due to start trading on the New York Stock Exchange the following day.

Shareholder benefits

Hilton Worldwide first announced its intention to split into three in February this year, and the move will see current stockholders receiving freshly issued shares in both new companies. They will also be granted one share of Park Hotels & Resorts for every five shares of Hilton Worldwide they own, and a single share of Hilton Grand Vacations per 10 Hilton Worldwide shares. No fractional shares are to be issued, so cash compensation will be made.

In addition, the company’s board also approved a 1-for-3 reverse stock split for Hilton Worldwide after the spinoffs are effected. This will reduce the current outstanding share count from approximately 990 million to around 330 million.

Christopher J. Nassetta, president & chief executive officer of Hilton, said: “As three independent companies, Hilton, Park Hotels & Resorts, and Hilton Grand Vacations will be well-positioned to capture incremental growth opportunities and capital market efficiencies in their respective business.

“With the appropriate leadership, strategic vision, and capital structures now in place at both Park and HGV, I am confident that each business will enhance long-term value for its respective shareholders.”