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LONDON, UK / ACCESSWIRE / January 20, 2017 / Active Wall St. blog coverage looks at the headline from Mid-scale hotel chain owner La Quinta Holdings Inc. (NYSE: LQ) as the Company contemplates the separation of its business into two independent publicly traded companies. The announcement was made by the Company on January 18, 2017, wherein its business will be separated into two divisions ? Real Estate and Franchisee and management. Register with us now for your free membership and blog access at:

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One of La Quinta Holdings' competitors within the Resorts & Casinos space, Wynn Resorts, Ltd. (NASDAQ: WYNN), is estimated to report earnings on February 09, 2017. AWS will be initiating a research report on Wynn Resorts following the release of its next earnings results.

Today, AWS is promoting its blog coverage on LQ; touching on WYNN. Get all of our free blog coverage and more by clicking on the links below:

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Sharing his views on the matter, Keith Cline, President and CEO of La Quinta said:

"This separation of our businesses could enable greater strategic clarity and allow us to take advantage of growth opportunities that naturally flow from each business model. This could also enable shareholders to own and value each business independently, allowing each company to attract the investor base most appropriate for its distinct investment profile."

The Company stated that at this stage the idea of separation is just a future possibility and there are no guarantees that the company will actually take this step. Any concrete steps or plans in this direction will be disclosed by the Company as and when it takes a decision.

La Quinta Holdings has retained J.P. Morgan as their financial advisor and Simpson Thacher & Bartlett LLP as their legal advisor for this purpose.

About La Quinta Holdings

Irving, Texas based La Quinta Holdings is the owner, operator, and franchisor of select-service hotels catering to the upper-midscale and mid-scale segments. The hotel chain operates the La Quinta Inn & Suites?, La Quinta Inn?, and LQ Hotel? brands. La Quinta Holdings has more than 880 properties located across 48 states in the US, Canada, Mexico, and Honduras.

The private equity firm Blackstone Group L.P. (NYSE: BX) owns the La Quinta Holdings. Blackstone Group had acquired La Quinta Holdings in January 2006. La Quinta Holdings was listed on the New York Stock Exchange in April 2014.

Why the company is contemplating separation of the business?

The strategic options of separating La Quinta Holdings business into two independent companies will involve the divestment of its real estate holdings into a separate business. The idea for separation is mainly so that the shareholders can get the maximum value at the same time the Company can take advantage of all possible growth opportunities. The Company sees it as the next logical step in the company's pursuit of business clarity and value creation for its shareholders. The separation of the business will also attract investors as per the business's investment profile.

One of the most important factors that La Quinta Holdings has to consider while creating a separate real estate business is that the deal would be taxable. The Company is looking to minimize its tax spending. La Quinta Holdings is therefore considering the formation of a real estate investment trust (REIT). It would be able to do so once the company is able to satisfy the REIT re-election rule. Many states in the US offer tax benefits to companies with captive REITs. In the event that La Quinta Holdings forms a REIT, the business would include the hotel properties owned by it. This would be a very unique value proposition and would easily attract investors.

The Company's hotel and franchisee business is robust and remains positive on the long-term outlook. The franchisee business generated over $100 million in 2016. In November 2016, the Company had announced that in Q3 2016, it had opened 15 new franchised hotels and signed 21 new franchise agreements. For the year 2016, the Company has 239 hotels in development pipeline of which 89% are new construction developments.

La Quinta Holdings reported a net income of $22.7 million and an adjusted net income of $22.1 million in third quarter 2016 ending on September 30, 2016. It also reported a total adjusted EBITDA of $100.7 million.

Stock Performance

At the closing bell on Thursday, January 19, 2017, the stock closed the trading session at $14.66, climbing 1.45% from its previous closing price of $14.45. A total volume of 2.90 million shares have exchanged hands, which was higher than the 3-month average volume of 1.21 million shares. La Quinta Holdings' stock price advanced 34.37% in the last three months, 17.56% in the past six months, and 31.83% in the previous twelve months. Moreover, the stock gained 3.17% since the start of the year. The stock currently has a market cap of $1.70 billion.

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SOURCE: Active Wall Street