Veteran hotel operator Hilton Worldwide Holdings (NYSE: HLT) has gone through several transformations as a company. Now, add another one to the list. The company’s proposed split into three separate entities has been approved by its board of directors.
This will result in two new companies — Park Hotels & Resorts, which is to hold Hilton Worldwide’s portfolio of hotels and resorts, and timeshare business Hilton Grand Vacations. The remaining assets will be held by Hilton Worldwide. The company said that the changes would be implemented after the close of the market on Jan. 3; Park Hotels & Resorts and Hilton Grand Vacations will start trading on the New York Stock Exchange the following day. Hilton Worldwide said that the ticker symbol for the former will be PK, and for the latter HGV.
Hilton Worldwide first announced its intention to divide into three this past February.
Current Hilton Worldwide stockholders will receive freshly issued shares in both new companies. They’ll 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; instead, cash compensation will be made. The record date for the distribution is Dec. 15, at 5 p.m. Eastern Time.
Additionally, the company’s board 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 roughly 990 million to around 330 million. As with the spinoffs, no fractional shares will be issued; eligible stockholders will receive financial compensation instead.
In the press release announcing the latest news, Hilton Worldwide stressed that it “intends for the distribution of PK and HGV common stock to be tax-free for its shareholders, except with respect to any cash received in lieu of fractional shares.”
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