Mar. 4, 2003 - With an eye toward pouncing on growth opportunities in a soft hotel market, Hyatt will plant its domestic and international hotel businesses under one umbrella in a restructuring to be announced Tuesday. 

The move also should better position the hotel operations--jewels of the Pritzker family empire--for an initial public offering or sale, observers said, though the company reiterated it has no such plans in the near term. 

Reports of such possibilities surfaced after the Chicago family acknowledged in December that it had reached a settlement earlier to break up its $15 billion empire and disperse the proceeds among individual family members. 

Hyatt Hotels Corp., which operates 123 hotels and resorts in the U.S., Canada and the Caribbean, and Hyatt International Corp., which runs 84 hotels and resorts in 39 countries, will remain separate operating companies, but will be overseen by a holding company, tentatively called Global Hyatt. The creation of the holding company should take 12 to 18 months. 

"While they will remain separate operating companies, they will aggregate the assets, resources and financial strengths of Hyatt worldwide to create a platform for growth," said Robert Allegrini, a spokesman for Hyatt Hotels Corp. 

The creation of a larger entity should make it easier to direct capital toward an acquisition or new development, or to borrow for such purposes, he said. "I think Hyatt has waited for the right time to strike for acquisitions, and the time to strike is now, when the market offers certain opportunities as a result of current economic conditions," Allegrini said. 

The restructuring was not precipitated by a recent lawsuit filed by Liesel Pritzker, the 18-year-old grandchild of patriarch A.N. Pritzker, Allegrini said. Liesel's suit alleges that her father emptied her trust funds, which once owned a stake in the hotel chain. 

Hyatt has no plans to go public in the next several years, Thomas J. Pritzker, chairman and CEO of Hyatt Corp., the parent of Hyatt Hotels, said recently. And that remains the company line. 

The restructuring should better position the hotel operations--which are expected to generate sales of $5.5 billion this year--for an IPO or sale, observers said. 

"There's more panache," said Ted Mandigo, an Elmhurst-based hotel industry consultant. "They will be able to take Hyatts in hot spots, glamour spots . . . and put them on the cover of an IPO to show off it more dramatically."The restructuring would give the company greater flexibility in how it directs its investment dollars, Mandigo said. "It should smooth out the development cycle and make it more strategic," he said. 

In any case, the time is hardly right for Hyatt to go public or put itself on the auction block, observers said. 

"Given that today's stock prices are based on depressed levels of earnings, Hyatt is probably not interested in raising public equity today," Will Marks, an analyst with JMP Securities, said. 

If the company were put on the block one informed source suggested it could fetch about $5 billion, but added that is a rough estimate because the private concern does not disclose how many hotels it owns and how many it manages. Hyatt officials declined to comment on outsiders' estimates. 

Thomas Pritzker on Tuesday will name Hyatt veteran Doug Geoga to direct the Global Hyatt initiative. He will take over Pritzker's role as president of Hyatt Corp. and of AIC Holding Co., the parent of Hyatt International. The Pritzker family owns both Chicago-based companies. 

Since 2000, Geoga has been president of the Hospitality Investment Fund LLC, also owned by the Pritzker family, and from 1994-1999, he was president of Hyatt Hotels Corp. 

"We believe difficult times like these represent investment and growth opportunities," Geoga said Monday. "This exercise will maximize our flexibility and our options." 

The reorganization involves a series of changes in the upper echelons of both Hyatt Hotels and Hyatt International. 

Edward Rabin, previously executive vice president and chief operating officer of Hyatt Hotels, becomes president of Hyatt Hotels, succeeding Scott Miller, who will move up to vice chairman. 

Bernd Chorengel will remain president of Hyatt International. 

Steve Goldman, a former executive with Starwood Hotels & Resorts, will oversee development and acquisition activities for the parent companies of both Hyatt Hotels and Hyatt International. 

Thomas O'Toole, formerly senior vice president for marketing and informational technology at Hyatt Hotels, will direct information technology, distribution strategy and related functions at both parent companies. 

And Kirk Rose, previously senior vice president of finance for Hyatt Hotels, becomes senior vice president of finance for both parent companies. 

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