On Tuesday, the S&P 500 was unchanged at 7,806, the Nasdaq was down 0.15% to 27,204, and the 10-year Treasury yield was up slightly to 5.219%. Hotel stocks were mostly positive, with Marriott and Hilton both up 0.6% and Hyatt up 1%.
Service Properties Trust (SVC) confirmed on October 9 that it had received an unsolicited proposal from TKO to acquire its hospitality portfolio for $2 billion in cash. The portfolio has 92 hotels with just under 21,000 rooms, putting the bid at roughly $95,000 a room. SVC’s 745 net-lease retail properties are not part of the offer. TKO, based in South Dakota, owns 58 properties with just over 4,000 rooms, so it is offering to buy about five times as many rooms as it owns. TKO didn’t disclose where the cash would come from. SVC’s market value was roughly $926 million when the offer landed, and TKO pointed out that SVC’s shares had fallen more than 50% over the past year. SVC’s stock jumped 14.95% on the news.
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