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Green Street Advisors Says the Corporate Governance Structure
 Proposed in Hyatt Hotels Corp.'s IPO "the Worst"

By Julie Wernau, Chicago TribuneMcClatchy-Tribune Regional News

October 29, 2009 --Green Street Advisors on Wednesday called the corporate governance structure proposed in Hyatt Hotels Corp.'s initial public offering "the worst in our entire coverage universe."

At the same time, hotel union Unite Here questioned the independence of Hyatt board members and vilified the proposed dual-class stock structure that would give Pritzker family members 10 times more voting power per share than Hyatt investors.

"The existing owners are sending a strong signal to outside public shareholders that the Pritzker family will firmly control Hyatt, even if the family's economic ownership interest falls below 50 percent," wrote John Arabia, senior lodging analyst at Green Street.

Arabia found the use of supervoting common shares "objectionable" and said the dual-class structure had a "foul odor."

But he also said "there is much to like about the Hyatt story," noting its solid brand and strong balance sheet. He priced the buy trigger at $24.50 per share, a bargain compared with other hotel companies, because of the governance issues.

Hyatt Hotels Corp. announced recently that the shares will be priced at $23 to $26. The offering is structured so the Pritzker family would own 80 percent of Hyatt's Class B common stock, each share of which has 10 times the voting power of a Class A common share. The company's initial public offering of 38 million Class A shares would raise between $874 million and $988 million.

Unite Here, involved in souring contract negotiations with Hyatt in Chicago, called the IPO "a series of reinforcing corporate-control structures which serve to protect current management and shareholders to the potential detriment of public investors."

jwernau@tribune.com

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