Gaylord Entertainment officials on Monday released information about the special shareholders' meeting that will help decide whether the company's planned $210 million sale of its brand and hotel management rights to Marriott International will proceed.
In a filing with the Securities and Exchange Commission setting that meeting for the morning of Sept. 19, Gaylord execs also beefed up their defense — albeit not in any major way — to the charge by TRT Holdings, their largest shareholder, that the Marriott deal is not the best path forward for the hotel and resort operator. The new proxy papers contain a number of passages that are new or have been clarified from the initial merger document. Among them:
• Some more detail on just what the Gaylord leadership team was looking for from Marriott: "In concluding to pursue this strategic option, our board of directors and management team focused primarily on three elements (presented in no particular order): the cash received in connection with the sale of the Gaylord Hotels brand and management rights to our Gaylord Hotels properties, the opportunity to realize substantial cost savings and revenue enhancements due to Marriott’s scale and reach in the hospitality market, and our positioning as a well-capitalized REIT focused on group oriented hotels in urban and resort markets."
• In an apparent response to TRT's contention that the agreement will give Marriott too much control at the expense of Gaylord investors, the answer to the Q&A question "Will the REIT conversion change our current operational strategy?" placed more emphasis on just what kind of say Gaylord will have in the collaboration. "We will have the right to participate in the decision making process with respect to some management activities including, but not limited to, the right to control certain renovation or construction projects and the right to review and approve certain aspects of preliminary business plans, assessment recommendations concerning the amount of funding allocated to replacements, renewals and additions to furniture, fixtures and equipment, certain capital expenditures, and the hiring of senior hotel management employees. Should we be unable to reach agreement with Marriott regarding those certain areas subject to our review and approval, the dispute will be resolved, in most cases, by a panel of experts."
The new filing also set a Dec. 10 deadline to complete the planned sale. The two companies have the option to extend that closing date.
Another new tidbit of info broke down some of the costs Gaylord expects to incur if its conversion to a real estate investment trust moves along as planned. Because such a REIT will require far less executive and operational manpower, Gaylord said it expects to pay out no less than $19 million in severance and retention costs. The total tab for the conversion and Marriott sale is still expected to come to $55 million.