Wyndham Worldwide Corporation (NYSE:WYN) has entered into a definitive agreement to acquire La Quinta Holdings Inc. (NYSE:LQ) from affiliates of The Blackstone Group L.P. (NYSE:BX) and others on January 17, 2018. Under the terms, shareholders of La Quinta will receive $8.4 per share in cash (approximately $1 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta's owned real estate assets into CorePoint Lodging Inc. Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging. Wyndham Worldwide expects to finance the merger with debt financing, which could include senior unsecured notes issued in capital markets transactions, term loans, bridge loans, or any combination thereof, together with cash on hand. In this connection, Wyndham Worldwide has entered into a commitment letter with Barclays Bank PLC, Deutsche Bank Securities Inc. and Deutsche Bank AG Cayman Islands Branch regarding a bridge facility in the amount of $2 billion, proceeds of which are intended to fund the consideration for the merger and related costs and expenses. To fund the transaction, Wyndham Worldwide Corporation, through its subsidiary, Wyndham Hotels & Resorts, Inc., intends to offer $500 million aggregate principal amount of senior unsecured notes due 2026 in a private offering. Also, in connection with the funding of the transaction, Wyndham Hotels expects to enter into (i) a $1.6 billion senior secured term loan B credit facility and (ii) a $750 million senior secured revolving credit facility. As of April 13, 2018, Wyndham Hotels & Resorts has arranged for commitments from lenders for a $1.6 billion senior secured term loan facility and has issued $500 million aggregate principal amount of senior unsecured notes due 2026 in a private offering. Wyndham Hotels has also arranged for a $750 million senior secured revolving credit facility, under which no borrowings are expected to be outstanding upon the spin-off or the La Quinta acquisition. Post transaction, La Quinta Holdings will operate as a wholly owned subsidiary of Wyndham Worldwide Corporation. Following the completion of the deal, La Quinta common stock will be delisted from the NYSE and deregistered. In the event of termination of the agreement, La Quinta Holdings will pay $37 million as the termination fee.

The transaction is subject to the approval of shareholders of La Quinta and Wyndham, approval of any waiting period under the HSR Act, approval of regulatory authority, consummation of each spin-off transaction agreement, reverse stock split and approval by the Board of Directors of both the companies and the satisfaction of other customary closing conditions. The consummation of the merger is not subject to a financing condition. The transaction has been unanimously approved by the Board of Directors of La Quinta Holdings Inc. The transaction has been approved by the Board of Directors of Wyndham Worldwide Corporation. As of March 2, 2018, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), in connection with the merger, expired. As of March 9, 2018, La Quinta Holdings established a record date of March 19, 2018 and a meeting date of April 26, 2018, for a special meeting of its shareholders to, among other things, consider and vote for the agreement. Certain affiliates with The Blackstone Group L.P. have entered into support agreement with Wyndham Worldwide covering shares of La Quinta common stock legally or beneficially owned by the Blackstone stockholders. Pursuant to and subject to the terms and conditions of the voting agreement, the Blackstone stockholders have agreed to vote all the La Quinta common stock owned by them in favor of the merger proposal and the charter amendment proposals. As of April 26, 2018, La Quinta shareholders approved the deal. As of May 8, 2018, the spin-off of core point lodging has been completed, thus satisfying another condition to the merger. The transaction is expected to close in the second quarter of 2018. As of May 8, 2018, the transaction is expected to close on May 30, 2018. The transaction is expected to generate $55-$70 million in annual synergies and is expected to be significantly accretive to Wyndham Hotel Group's 2019 adjusted earnings.

Ragavan Bala of Barclays is acting as exclusive financial advisor whereas David B. Feirstein, P.C., Willard Boothby, Carlo Zenkner, Daniel Wolf, P.C., David Fox, P.C., Dean Shulman, Sara B. Zablotney, P.C., Adam Kool, Roberto S. Miceli, Ashley Gregory, P.C., Suhan Shim, Dylan Hanson, Christopher Saki, Kate Coverdale, David M. Towarnicky, Emily Pence, Tristan Evans-Wilent, Marsha Mogilevich, Marc Weinstein, Marin Boney, Javaad Ali, Aaron Lorber, Christian O. Nagler, Mark L. Kovner, Jessica Subler (inactive), Joy M. Dineo, Mo Green, Scott M. Metzger, East Berhane, Sam Moss, Aaron J. Newell, Lucy Frey, Christine A. Lacku, Erika Kiran Solanki, Jennifer Karinen, Jennifer Fernandez (inactive), Sara Michaelchuck Webber, Malhar Naik, Scott D. Price, Richard Kidd, Bryan M. O'Keefe, Michael D. Thorpe, Jack N. Bernstein, Joel Gory, Seth Traxler, P.C., Rachel S. Brown, P.C., Rachel S. Hansen, Ronald K. Anguas, Mike Beinus, P.C., Michael Graham, Ellen M. Jakovic, Mario Mancuso, P.C., Matthew Solum, P.C., Christine Strumpen-Darrie and Daniel Rathauser of Kirkland & Ellis LLP acted as the legal advisors to Wyndham Worldwide Corporation. Lonny Henry and Davin Thigpen of J.P. Morgan Securities LLC acted as exclusive financial advisors and provided fairness opinion to La Quinta Holdings Inc. La Quinta Holdings Inc. will be paying a fee of $33.5 million to J. P. Morgan Securities LLC in connection with the merger and spin off, out of $33.5 million, $3 million was paid for the opinion and the rest of the amount is contingent and payable upon the consummation of the proposed merger and the spin- off. Eric Swedenburg, Jakob Rendtorff, Erika Tang, Seth Lowinger, Edgar Lewandowski, Lia Toback, Ben Heriaud, Christine Turner, Sas Mehrara, Steven Stickler, Jason Mohr, Leanne Welds, Brittany Baclawski, Brendan Galloway, Brian Gluck, Leah Nudelman, Karnellia Brake and Michael Yan, John Hart, Drew Purcell, Brian Mendick, David Rubinsky, Jeannine McSweeney, Jason Fixelle, Peter Guryan, Kelly Karapetyan, Ellen Frye, Daniel Owsley, Steve DeLott, Lori Lesser and Kate Stein, Adeeb Fadil, Noreen Lavan, Timothy Mulvihill, James Rapp, Mike Isby, Jonathan Zane and Amanda Weiss of Simpson Thacher & Bartlett LLP acted as the legal advisor to La Quinta Holdings Inc. Melissa Sawyer and Maryanne Paul of Sullivan & Cromwell LLP provided legal advice to JPMorgan on the deal. Venable LLP acted as legal advisor to The Blackstone Group L.P. Innisfree M&A Inc. acted as proxy solicitor to La Quinta Holdings Inc. and was paid a fee of $0.025 million.

Wyndham Worldwide Corporation (NYSE:WYN) completed the acquisition of La Quinta Holdings Inc. (NYSE:LQ) from affiliates of The Blackstone Group L.P. (NYSE:BX) and others on May 30, 2018. Wyndham Worldwide financed the transaction with incremental borrowings and available cash. James Abrahamson, Glenn Alba, Scott Bergren, Alan J. Bowers, Henry G. Cisneros, Keith A. Cline, Giovanni Cutaia, Brian Kim, Mitesh B. Shah and Gary M. Sumers voluntarily resigned from the Board of Directors of La Quinta and Directors of Wyndham Worldwide, Paul Cash, Robert Loewen and Nicola Rossi became the initial Directors of La Quinta.