Pritzkers Checking Out of Ramada : Cut Stake to Less Than 5% as Hotel Chain Restructures
The Pritzker family has reduced its stake in Ramada Inc. to less than 5%, indicating that the billionaire clan has chosen to take profits rather than try to take over the Arizona-based hotelier, analysts said Tuesday.
HCC Corp., a Chicago company headed by Jay A. Pritzker, said in an April 5 filing with the Securities and Exchange Commission that it had sold 959,100 shares of Ramada stock from March 16 through April 5 at an average price of $11.29 a share.
Ramada stock closed Tuesday at $11.625, down 12.5 cents a share from Monday’s close in New York Stock Exchange trading.
The sale leaves the Pritzkers, owners of the Hyatt hotels and the industrial conglomerate Marmon Group Inc., with just under 1.9 million shares of Ramada, or about 4.8% of the company’s outstanding shares, according to the SEC filing.
Pritzker would not comment on the reasons for the stock sale, said his secretary, Ronda Scheiss.
HCC announced last September that it had acquired a 7.2% stake in Ramada, making it the company’s largest shareholder, and offered to buy the rest of Ramada’s stock for $10 a share, or a total of about $368 million.
Ramada rejected the offer and in October began a restructuring that includes the sale of its 825 hotels and its Marie Callender’s Pie Shops Inc. business, which it acquired in 1986.
Under the restructuring, Ramada will retain its hotel-casino operations in New Jersey and Nevada. Those holdings include the Tropicana resort-casino in Las Vegas; the newly remodeled TropWorld resort-casino in Atlantic City, N.J.; the Ramada Express hotel-casino in Laughlin, Nev., and Eddie’s Fabulous ‘50s Casino in Reno.
Ramada has since agreed to sell Marie Callender’s to Wilshire Restaurant Group Inc., a group of private investors from New York, and expects to announce the sale of its hotel group by midyear, said spokesman Joe Cole from company headquarters in Phoenix.
“We haven’t heard from the Pritzkers since last October, so I don’t think we have any comment on what they’ve just done,” Cole said in a telephone interview.
John Uphoff, a stock analyst who follows Ramada for Raymond James & Associates in St. Petersburg, Fla., said the Pritzkers apparently acquired their initial stake in Ramada for $4 to $6 a share and “decided they would be better served by taking their profits and letting management restructure the company.”
Ramada stock has risen from about $9 a share to nearly $12 a share since the company announced its restructuring plan.
Ramada reported a net loss of $5.1 million for 1988 on revenue of $476.6 million. The hotel and restaurant operations showed a net loss of $3.9 million for the year.
