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The Call @ Hedgeye | March 28, 2024

Yesterday, Hyatt Hotels filed a fourth revised version to its S-1 originally filed on August 5th.  This latest version gave another interesting glimpse into the disputes of the Pritzker family, which are partially responsible for the timing of this IPO. 

The latest round of changes allows certain members of the Pritzker plan to dispose their stock more rapidly in Hyatt while allowing others that want to stay involved in the company more voting rights in accordance with percentage ownership. Bottom line, these changes will allow those members who want out to get out and ease internal family conflicts.   The three main amendments to the Global Hyatt Agreement and the Foreign Global Hyatt Agreement are summarized below, as they related to Pritzker family members and their spouses.

  • Changed the basis upon which voting power is determined to % ownership basis
    • Duration of the voting and lock-up restrictions will now be measured on percentage of ownership versus voting power of shares for stock that is owned by Pritzker family members
  • Increased the % of restricted common stock that can be sold to 25% of holdings annually vs 20%
    • Pritzker family members are now permitted to sell up to 25% of their aggregate holdings of Hyatt common stock, measured as of the date of effectiveness of the registration statement, and each twelve-month period following rather than 20%.
    • Additionally, the prohibition on selling shares to any aggregator, disclosing an intent other than for investment was removed
  • Allows Pritzker family members that aren’t “restricted” to sell 100% of their stock faster
    • Distribution of Hyatt stock for the benefit of any Pritzker family members as soon as practicable following the date of effectiveness of the registration statement, subject to the 180-day lock-up period. 
    • Pritzker family members, other than those who are party to the Agreement Relating to Stock, may now sell up to 100% of their common stock over a shorter period of time. 

The IPO is coming and we will have a lot more to say in the weeks ahead.  Hyatt is a powerful brand and this IPO is interesting on levels more than just a big name hotel company going public.  Should the ownership structure justify a discount?  Will the Street get the margins right?  Is now the right time?  What differentiates Hyatt from the competition?  These are all questions we will address ahead of the IPO.