Gaylord to sell brand to Marriott for $210 million, needs lender consent

By Lisa Kerner

Charlotte, N.C., May 31 - Gaylord Entertainment Co. announced it agreed to sell the Gaylord Hotels brand and the rights to manage its four hotels to Marriott International, Inc. for $210 million in cash.

The sale is subject lender consent to amendments to Gaylord's credit facility and other conditions.

Effective Jan. 1, 2013, a reorganized Gaylord will operate as a real estate investment trust. The company will continue to own its hotel properties and other businesses.

Marriott will manage the four properties under the Gaylord Hotels flag.

The move follows a comprehensive review by Gaylord of its strategic options to maximize long-term value for shareholders.

As a REIT, Gaylord will focus on group-oriented destination hotels in urban and resort markets, a company news release said.

A special meeting of stockholders is expected to be held in the third quarter for the purpose of voting on shareholder proposals that will facilitate becoming a REIT.

By year's end, Gaylord plans to issue a special, one-time taxable dividend of its undistributed earnings and profits to its shareholders after receiving a private letter ruling from the Internal Revenue Service. The dividend will total about $415 million to $450 million.

Gaylord intends to pay 80% of the dividend in shares of Gaylord common stock and 20% in cash and incur about $55 million of one-time conversion, transaction and severance expenses.

The Nashville hospitality and entertainment company will continue to own and operate the Grand Ole Opry, Ryman Auditorium and other attractions as taxable REIT subsidiaries.

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