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Hyatt Hotels Corp (NYSE:H) announced on Sunday that it has entered into an agreement to repurchase 1,642,251 shares of its Class B common stock from the Margot and Tom Pritzker Foundation for $249,999,869.73. The transaction is set at a per-share price of $152.23, which is the volume-weighted average price of Hyatt's Class A common stock over the three trading days ending on September 20, 2024.
The repurchase is part of Hyatt's ongoing buyback program and is expected to close today. Upon completion, the repurchased Class B shares will automatically convert to Class A shares and then be retired. This will reduce the number of authorized Class B shares and return the converted Class A shares to the status of authorized but unissued stock.
Following this transaction, Hyatt will have approximately $982 million remaining under its current repurchase authorization. The deal aligns with Hyatt's capital strategy and reflects the company's commitment to managing its share count.
The Purchase and Sale Agreement, dated September 22, 2024, is attached as Exhibit 99.1 to the SEC filing, which provides the basis for this report. The repurchase underscores Hyatt's financial strategies and shareholder value focus, as the company leverages its repurchase program to adjust its capital structure.
Hyatt's stock is listed on the New York Stock Exchange, and the company is headquartered in Chicago, Illinois. The company has not provided any further details on the transaction or its future capital allocation plans. This repurchase initiative is based on the company's latest SEC filing.
In other recent news, Hyatt Hotels Corporation has been the subject of several strategic evaluations and projections by prominent financial firms. Goldman Sachs has initiated coverage on Hyatt with a Neutral rating and a price target of $151.
The firm acknowledged Hyatt's strategic move towards an asset-light model and its strong presence in the luxury segment. However, Goldman Sachs also expressed cautiousness due to Hyatt's significant exposure to the Chinese market and a limited number of projects under construction.
Hyatt has also decided to implement the Oracle (NYSE:ORCL) OPERA Cloud platform as its new property management system across its worldwide hotel portfolio. This move is expected to standardize operations and improve data management, enhancing efficiency and consistency in guest experiences.
The company has been making significant strategic moves, including the sale of the Orlando Hyatt Regency and the acquisition of Standard International. Financial services firms Jefferies, Stifel, and JPMorgan have raised their price targets for Hyatt to $152, $151, and $164 respectively. This follows Hyatt's recent strategic actions, which align with its transition towards an asset-light business model.
Citi has reaffirmed its Neutral stance on Hyatt, maintaining its $165 price target. The firm's third-quarter 2024 earnings per share (EPS) estimate for Hyatt has been set at $0.95, and the full-year 2024 EPS estimate has been raised to $4.37. However, the fiscal year 2025 EPS estimate has been adjusted downwards to $4.04. These are the recent developments in Hyatt's strategic and financial landscape.
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