Starwood Heats Up After CEO Departure - TheStreet

Starwood Heats Up After CEO Departure

Shares rise after an analyst says the move could pave the way for a company sale.
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The departure of

Starwood Hotels'

(HOT)

chief executive sent the stock climbing more than 4% after one analyst said the news could pave the way for a buyout of the company.

Starwood said early Monday that CEO Steve Heyer resigned after "issues with regard to his management style" led the board to lose confidence in his leadership.

Bruce Duncan, the White Plains, N.Y.-based hotel owner's chairman, will take over as interim CEO while the company conducts a search for a permanent placement.

Citigroup analyst Joshua Attie said the resignation is not a sign that something is wrong at the company, but instead likely reflects conflicts of personality and management style.

"Change in leadership may serve as a catalyst for Starwood to explore the possibility of an outright sale," Attie wrote in a research note Monday.

"We have no specific knowledge of a transaction, but the environment seems right in which to sell the company. Private market demand for hotel real estate and high quality brands seems robust," he wrote.

For its part, Starwood said it plans to continue with its current strategy.

"The board is confident in Starwood's prospects and focused on continuing to build shareholder value," Duncan said in a statement. "I will be based in White Plains and look forward to leading Starwood as we execute its successful continuing transformation from a cyclical real estate business into a leading global hotel operator and lifestyle company."

Starwood, whose brands include Sheraton and Westin, backed its earnings targets for the first quarter and full year. In February, the company projected first-quarter earnings of 38 cents a share and a full-year profit of $2.50 a share.

Analysts polled by Thomson Financial project EPS of 39 cents for the quarter and $2.52 for the year.

Starwood shares recently traded at $67.71, up $2.86.