NASHVILLE, Tennessee—Shareholders expecting a resolution to the battle for control of Gaylord Entertainment Company will have to wait a little longer, company executives said Tuesday during an earnings call.
An extension to the company’s shareholder rights plan, set to expire 12 August, will be subject to the vote and approval of shareholders. Gamco Investors’ CEO and CharimanMario Gabelli has urged investors to vote down the proposed extension of the 22% “poison pill” plan, thereby allowing Gamco, or another investor, to buy enough shares to take control of the company.
Gamco has purchased thousands of Gaylord shares in recent weeks to that end. The company’s stake now stands at 13.5%, trailing only TRT Holdings and Columbia Wanger.
For its part, Gaylord’s management board has responded with an exhaustive investigation of all possible alternatives to unlock value in the company, said Colin V. Reed, chairman and CEO. It is the view of Gaylord’s board and management team that the company has traded “substantially below” it’s true value during the past 12 months, he said.
The company’s stock was $34.02 in morning trading Tuesday after the company’s earnings call. Its 52-week range was $17.39 to $35.89.
Gaylord has spent the better part of six months investigating how to ensure equity trades are more in line with the actual value of the business, Reed said.
The process, which has employed a “fleet” of advisers that saw corporate costs surge 30% during the quarter, is nearing completion, he said.
“Our plans still need a little more work, and therefore you’ll have to be patient with us for a little bit longer as for the details of what we have in mind,” Reed told analysts during the conference call.
Reed declined to disclose any details about the investigation, including possible strategic alternatives, despite several questions from analysts.
“I wish I could be a little bit more expansive, but the facts are the plan needs some final work to go—some discussions with our board—and I think it would be inappropriate for me to set expectations here in terms of timelines,” he said.
Company performance
Consolidated revenue increased 8.2% to $238.9 million for Gaylord during the quarter, fueled in part by a 3.8% gain in revenue per available room and a 4.9% increase in total RevPAR, which includes food-and-beverage sales and other ancillary services in addition to room rate.
Group sales were up as well and are projected to maintain their upward arc. The company during the quarter booked 306,468 roomnights for 2012, which represents an increase of 11.6% over last year.
Total advance bookings for all future periods were a bit more muted, with a year-over-year increase of only 3.3%. The number is a reflection of Gaylord’s continued emphasis on pushing rate, according to David C. Kloeppel, the company’s president and COO.
“The demand is there, and now we’re focused on being wise about how to book rooms for next year and at what rates we book it.”
The company also is shifting away from lower-rated summer group business in favor of higher-rated leisure demand, the executive said.
