Hyatt Hotels (H) is in exclusive discussions for a potential takeover of Playa Hotels & Resorts (PLYA), both companies announced on Monday. Alongside the potential takeover, Hyatt is also exploring other strategic options for the resort operator, valued at $1.2 billion. Shares of PLYA surged by more than 20% in pre-market trading following the announcement.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Playa, which operates 24 high-end, all-inclusive resorts across Mexico, disclosed that its board has been evaluating various opportunities and engaging with multiple potential partners.
Hyatt Already Has a Stake in Playa
The exclusive talks with Hyatt, which already owns a 9.99% stake in Playa, are expected to continue until February 3 or until a deal is finalized. However, the company cautioned that there is no guarantee of a transaction. The two companies share an existing partnership, with Playa operating resorts under Hyatt’s Hyatt Ziva and Hyatt Zilara brands.
Hyatt’s potential acquisition of Playa could bring substantial strategic advantages. The hospitality company noted that “strategic alternatives under consideration could have compelling strategic merit to add new incremental durable fee streams.” Despite this, Hyatt reiterated its commitment to an asset-light business model, emphasizing its preference to avoid heavy investment in real estate ownership.
Is Hyatt a Good Stock to Buy?
Analysts remain cautiously optimistic about Hyatt stock, with a Moderate Buy consensus rating based on seven Buys and nine Holds. Over the past year, Hyatt has increased by more than 20%, and the average H price target of $163.61 implies an upside potential of 2.4% from current levels.
