Hyatt/Playa ponder more for Jamaica and Mexico as merger talks proceed
Hyatt Hotels is in talks to potentially acquire Playa Hotels & Resorts – the company which purchased five Jamaican hotels from Jamaican company Sagicor -with the corporate targeting expansion of its presence in the all-inclusive resort market across the Caribbean and Mexico.
Shares of Playa Hotels went up Monday after the hotel operator said it is in discussions to be acquired by Hyatt Hotels. An exclusivity agreement Playa and Hyatt signed will run until either a deal is reached, or through Feb. 3.
Playa operates 24 resorts across Jamaica, the Dominican Republic, and Mexico, including collaborations with Hyatt, Wyndham, and Hilton.
Steve Gelsi of marketwatch.com notes that Playa Hotels (PLYA) and Hyatt (H) have already worked together on a number of properties that Playa Hotels manages including the Hyatt All-Inclusive, Hyatt Zilara, and the Hyatt Ziva.
Playa Hotels & Resorts NV's stock was rallying 24 per cent on Monday after the company said it agreed to enter into exclusive strategic talks with Hyatt Hotels Corp. in a move that would boost the larger hotel chain's presence in Jamaica, Mexico and the Dominican Republic.
Steve Gelsi said that the talks could result in a merger deal that would likely top the $1.2 billion market capitalization of Playa Hotels as of Friday's close.
“All told, Playa Hotels owns or manages 24 resorts with 8,627 rooms. Hilton said the talks with Playa "could have compelling strategic merit to add new incremental durable fee streams for Hyatt."
Playa properties hit a speed bump with hurricane Beryl but are said to be in recovery mode.
Playa, meanwhile, is eyeing Hyatt’s client base. Steve Gelsi notes how on the company's most recent quarterly call with analysts Playa Hotels Chief Executive Bruce D. “Wardinski said while Hyatt has been making inroads into some of Playa's areas, they aim for a different client base.
"They're very large properties with lots and lots of rooms," he said. "They go after, quite honestly, a different kind of customer."
Sagicor Jamaica has an interest in Playa is held by an affiliated company, Jamziv Mobay Jamaica Portfolio Limited (Jamziv), which holds over 20,000,000 of Playa’s ordinary shares.
In 2018, Playa first acquired the Jewel brand in a deal with Sagicor Group Jamaica Limited under which Sagicor contributed to Playa a portfolio of five all-inclusive resorts and two adjacent oceanfront developable land sites located on the desirable North Coast of Jamaica.
The portfolio included four existing resorts including the 489-room Hilton Rose Hall, the 268-room Jewel Runaway Bay, the 250-room Jewel Dunn’s River and the 225-room Jewel Paradise Cove.
It also included an 88-room hotel tower and spa, two developable land sites with a potential density of up to 700 rooms and a hotel management contract for the Jewel Grande Palmyra.
In exchange, Sagicor received 20 million shares of PLYA common stock and US$100 million in cash. In addition, Playa agreed to nominate Sagicor appointees to Playa’s Board.
In Mexico, Playa owns and manages Hyatt Zilara Cancun, Hyatt Ziva Cancun, Panama Jack Resorts Cancun, Panama Jack Resorts Playa del Carmen, Hilton Playa del Carmen, Hyatt Ziva Puerto Vallarta and Hyatt Ziva Los Cabos.
In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall and Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Dunn’s River Beach Resort & Spa, Jewel Grande Montego Bay, Jewel Runaway Bay Beach Resort & Waterpark and Jewel Paradise Cove Beach Resort & Spa.
In the Dominican Republic, Playa owns and manages the Hilton La Romana, Hyatt Ziva Cap Cana and Hyatt Zilara Cap Cana. Playa also owns four resorts in Mexico and the Dominican Republic that are managed by a third party and Playa manages the Sanctuary Cap Cana, in the Dominican Republic.
Information Sources: Dow Jones Newswires. msn.com and Skift.com
Information Sources: Dow Jones Newswires. msn.com and Skift.com
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