|By Suzanne Marta, The Dallas Morning News|
Knight Ridder/Tribune Business News
May 12, 2005 - Reports that Wyndham International Inc. might be on the auction block caused a flurry of investor activity Wednesday.
A story in The Wall Street Journal reported that the Dallas-based hotel operator has put itself up for sale, citing people familiar with the matter.
The report fueled trading levels to more than four times the stock's typical volume, although the share price rose only a penny to 99 cents.
This was the second time in recent weeks that speculation has emerged on a Wyndham sale. Hotel Business reported April 26 that a deal to sell the hotel company could be imminent, saying that several major branded hotel companies had entered into discussions to acquire its assets.
A spokeswoman for Wyndham said that the company did not comment on market rumors or speculation.
Wyndham has spent the last six years working to pay down more than $4 billion in debt by selling non-core assets and streamlining operations.
At the end of the first quarter, that debt had been cut to $1.67 billion.
On Tuesday, the company reported that it had refinanced $1.65 billion of its of its debt and corporate credit facility to 2011.
Fred Kleisner, Wyndham's chairman, president and chief executive, said in a statement that the deal was a confirmation of the company's financial strength by the lending community.
In April, the company also announced a simplification of its capital and governance structure.
Hospitality consultants said Wednesday that strong fundamentals in the industry have turned lodging companies into targets for investment capital in recent months.
Demand for hotel rooms has steadily risen during the last two years, but few new properties have been built -- a condition that has led to stronger profits for many industry players.
"I'd be hard-pressed to say there's been a better time in the last 20 to 30 years to be coming to market," said Mark Woodworth, executive managing director for PKF Hospitality Research in Atlanta.
With just 142 hotels, Wyndham could benefit from its relatively small footprint because there's more opportunity for growth.
Unlike many of its biggest competitors, which already have multiple properties and brands in most major cities, "there are still a lot of markets where Wyndham doesn't have a lot of representation," Mr. Woodworth said.
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