Hyatt and Playa Begin Merger Discussions for Hotel Investment.
Playa Hotels & Resorts N.V. confirmed on Monday that they are in exclusive talks with Hyatt Hotels Corp. to explore strategic options, including a possible acquisition. This agreement will last until February 3, 2025. If the merger goes through, it would exceed Playa Hotels’ $1.2 billion market capitalization as of last Friday.
Playa Hotels currently operates 24 resorts with 8,627 rooms in popular destinations like Jamaica, Mexico, and the Dominican Republic. They are known for managing all-inclusive resorts like Hyatt Zilara and Hyatt Ziva in partnership with Hyatt.
Analysts like C. Patrick Scholes from Truist Securities see Playa as a strong candidate for acquisition due to their undervalued shares. If Hyatt acquires Playa, they may convert non-Hyatt branded hotels into Hyatt properties and potentially sell the real estate. Truist Securities values Playa shares at least $13 based on EBITDA multiples, seeing potential for higher value in the future.
Playa stated that their Board of Directors is focused on maximizing shareholder value and has been in discussions with various potential buyers. Meanwhile, Hyatt, which already owns 9.99% of Playa shares, sees this merger as an opportunity to expand their presence in the Caribbean and generate new revenue streams.
Both companies are committed to finding a strategic solution that aligns with Hyatt’s asset-light business model. If the merger proceeds, Hyatt aims to enhance their portfolio with Playa’s high-quality resorts while maintaining a clear path towards an asset-light outcome.
In a statement, Hyatt President and CEO Mark Hoplamazian expressed admiration for Playa and its robust all-inclusive resorts, emphasizing the potential benefits of the merger for both companies. Playa’s Chairman and CEO, Bruce Wardinski, highlighted the dedication of their team and expressed openness to exploring various opportunities to benefit their shareholders.
Overall, the exclusive merger talks between Hyatt and Playa signal a potentially significant development in the hospitality industry, with both companies poised to create synergies that could drive growth and innovation in the future.
