Playa Hotels Stock Pops on Acquisition Negotiations With Hyatt

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Key Takeaways

• Shares of Playa Hotels jumped Monday after the hotel operator said it is in discussions to be acquired by Hyatt Guest-houses.
• The exclusivity agreement Playa and Hyatt signed will run until either a deal is reached, or through Feb. 3.
• Playa acts two dozen resorts across Jamaica, the Dominican Republic, and Mexico, including collaborations with Hyatt, Wyndham, and Hilton.

Playa Guest-houses’ (PLYA) shares surged Monday after the resort operator said it has entered into an agreement to explore a possible acquisition by Hyatt Hotels (H).

The sides will discuss “strategic options,” including a potential acquisition, and the agreement wishes last either until a deal has been made, or through Feb. 3, Playa said Monday.

Hyatt Chief Director Officer Mark Hoplamazian on Monday called Playa a “valuable partner for many years,” and said a potential buy could “have compelling strategic merit to add new incremental durable fee streams for Hyatt.”

Playa Hotels Runs Remedy have recourse ti in Mexico, Jamaica, Dominican Republic

Playa operates two dozen resorts with more than 8,600 lodges across Mexico, Jamaica, and the Dominican Republic, under brands including Hyatt, Hilton (HLT), and Wyndham (WH). Hyatt runs more than 1,300 hotels across 79 countries.

In its latest earnings call last month, Playa CEO Bruce Wardinski repeated Playa’s belief that there is “tremendous opportunity” for consolidation in the all-inclusive resort industry. When discussing a grapple with Hyatt had made with another resort company that operates in some of the same markets as Playa, Wardinski affirmed Hyatt was “just really smart strategically” and said the deal likely wouldn’t have much impact on Playa’s house.

Hyatt shares were nearly 2% lower Monday. Playa shares were up about 28%, beat it move onwards them greater than 40% higher on the year.