Hyatt Appears More Likely to Acquire Playa Hotels
Skift Take
Truist downgraded Playa Hotels & Resorts to Hold, seeing an increased likelihood of a Hyatt acquisition that could boost Hyatt’s share price as PLYA nears its $13 target.
The DJIA fell 178 points, Nasdaq was down 375, the S&P 500 was down 66 points and the 10-year treasury yield ended at the highest level since April, up .06 to 4.68%. Lodging stocks were lower.
Truist downgraded Playa Hotels & Resorts to Hold from Buy, saying they now feel there is a greater likelihood than not that the transaction for Hyatt to buy them will be completed. Previously, they were skeptical as they didn’t think Hyatt wanted a real estate-heavy company. Truist believes that if H buys PLYA at 10x and sells the hotels at prices above 10x multiple, it will give them $3, which is a share price accretion. This could be even higher if H maintains a management and/or franchise contract on any sold properties. H would also grow its shares in key Caribbean/Mexico regions. As for the downgrade of PLYA, the stock has gotten close to its $13 price target.
