shares gained as much as 21% Friday after the hotelier announced it would sell 25 hotels for $366 million.
A partnership of a private investment fund managed by Goldman Sachs and affiliates of Highgate Holdings is the buyer. The company calls the hotels non-strategic, although 15 of them have the Wyndham brand and will be operated under new franchise agreements with Wyndham. The company expects the deal to close in the first quarter of 2005.
In reaction, Wyndham stock was up 21 cents, or 20%, at $1.26.
The sale completes a five-year program of hotel sales aimed at reducing debt and focusing the company's holdings on its core brand. Since 1999, Wyndham has sold 180 non-strategic hotels for more than $2.5 billion.
"Now that our formal asset disposition program is complete, the reduction of our company debt allows us to take advantage of the current capital market conditions and refinance our 2006 corporate debt maturities," said Fred Kleisner, Wyndham's chairman and chief executive. "The reduction of debt also allows us to invest in our remaining 33 owned assets through high-return investment projects and access capital for brand growth in strategic markets."
At the end of the third quarter, Wyndham's debt totaled $2.25 billion. In the nine months ended Sept. 30, the company lost $398.3 million, including $353.7 million of impairments from asset sales.