Pritzker family may take Hyatt Corp. public
By Jeannine DeFoe
Bloomberg News Service
CHIGACO — Chicago's Pritzker family may sell shares in their Hyatt Corp. hotel company to the public and break up the rest of their empire to settle a financial dispute between family members, said a person familiar with the situation.
Bloomberg News Service
The Pritzkers decided last year to divide its $15 billion of investments after some family members threatened lawsuits over control of Hyatt's vast holdings, the New York Times and Wall Street Journal reported. Eighteen-year-old Liesel Pritzker alleged in a lawsuit last month that her father, Robert Pritzker, tried to deprive her of a $1 billion inheritance.
International flags fly on the property of the Hyatt Regency Hotel in downtown Chicago, Ill., where the Pritzker family may sell shares in their Hyatt Corp. hotel company to the public and break up the rest of their empire to settle a financial dispute between family members.
A break up of the company, whose holdings also span cruise lines and banks, would come about four years after the death of family patriarch Jay Pritzker, who took a single property and turned it into one of the world's largest hotel chains with more than 200 locations worldwide.
A sale of shares in Hyatt would also come with the hotel industry poised to emerge from a two-year slump brought on by a decline in business travel.
"Over next three years, the outlook for the U.S. hotel industry is very good," said Mark Abramson, an analyst at Bear Stearns International Ltd. in London. "The pipeline of new supply is pretty low. When the U.S. economic recovery comes through, the industry will be in this sweet spot where supply is low and demand is growing."
Thomas Pritzker, chairman of Hyatt, didn't return a voicemail and other messages left at his office. Lori Armon, a spokeswoman for the company, didn't return a voicemail message left at her office yesterday.
The break up contemplates distributing stakes in Hyatt's businesses to family members to do with as they wish. Previously, the company had been run for the benefit of the family as a whole. The Pritzker family also controls industrial businesses through Marmon Group and has real-estate holdings as well as a 25 percent stake in Royal Caribbean Cruises Ltd., the Journal said.
A year ago, Superior Bank FSB, the Chicago-area thrift that failed in July 2001 and which the Pritzker family co-owned, agreed to pay the government $460 million. Regulators shut down Superior in July after finding that losses on home and car loans to people with tarnished credit had depleted almost all of the bank's capital.
Marmon is a collection of over 100 companies that provide construction, industrial, retail and cable products. One of Marmon's biggest units is Union Tank Car Co. a maker of railroad tank cars, according to Standard & Poor's. Marmon has annual revenue of $6 billion, S&P said.
With the family now in its fourth generation, it was inevitable that stakes of Hyatt would be distributed and the hotel company would be taken public, several unidentified people close to the family told the Wall Street Journal. No final decision has been made, the person familiar said.
A statement from 11 family members called the agreement a "common strategy for generational transition," the Journal said. The agreement was reached last year but not made public at the time, the Journal and the Times reported.
