NASHVILLE, Tennessee—Gaylord Entertainment Company’s biggest shareholder has reversed course, now agreeing to vote for Gaylord’s proposed transition to a real-estate investment trust and commencing to sell its interest in the company.
TRT Holdings, which owns approximately 20% of Gaylord’s shares, will vote in favor of the proposed move during a shareholders vote 19 September, Gaylord executives said Tuesday in their second-quarter earnings release. Gaylord in late May said it was selling its management company and brand to Marriott International for $210 million and would also elect to be treated as a REIT focusing on group-oriented hotels in urban and resort markets.
TRT last month said it had intended to vote against the proposal. James Caldwell, TRT’s president, could not be reached for comment prior to deadline. Officials at Marriott also could not be reached.
However, that saber rattling appears to be finished. In addition to voting its shares in favor of Gaylord’s proposal, Gaylord executives said TRT also sold 5 million shares of Gaylord stock, at $37 per share, back to Gaylord. TRT agreed to not purchase any Gaylord shares or seek representation on Gaylord’s board for three years. Shares of Gaylord closed at $37.95 per share on 31 May when the deal was announced.
The 5 million shares represent 47% of TRT’s Gaylord investment. Further, TRT today commenced selling its remaining 5.6 million shares and has plans to exit its investment in Gaylord, executives at Gaylord said.
During the company’s second-quarter earnings call today, chairman and CEO Colin V. Reed said the transition to REIT status is on schedule and the company is on target to hand over the management reins on 1 October, pending the shareholder vote.
“We are working hard every day with Marriott and the teams from Marriott to finalize the organizational structure,” Reed said during the call. He added that the conversion to REIT status is the best way for Gaylord to capitalize on where the hotel industry is in the recovery cycle.
The deal now appears destined to be approved, said Christopher Jones, a gaming and hospitality analyst with Telsey Advisory Group, who follows Gaylord.
“They addressed TRT’s issues by giving them a price they view as an exit point,” he said.
