Spin-off of Marriott Vacations set
The spin-off of Marriott Vacations Worldwide (VAC) was approved by the Marriott International (MAR) Board of Directors yesterday, October 25. The record date for eligibility to receive the spin-off securities has now been fixed at close of business November 10 and the distribution date at November 21. The spin-off ratio has also been finalized at 1 for 10, that is, for every 10 share of MAR owned as of the record date, shareholders will receive 1 share of Marriott Vacations Worldwide (VAC).
Interestingly, it looks like the spin-off could be effected before the announcement of 3rd quarter earnings. Remember, the Form 10 states that VAC will recognize a write-down of $324 million in the 3rd quarter, but this doesn’t yet show up in the Form 10 pro-forma financials. I’m not sure when VAC will report earnings but I can hardly imagine a less propitious set of circumstances for a spin-off.
VAC shares should begin trading in the ‘when issued’ market around the record date. In a prior post I wrote that VAC shares might trade in the $3-$9/share range (but who really knows?). One might think that the shares should begin trading at the top end of the range and then possibly take the post spin-off plunge. Mr. Market is really unpredictable, though, so you never really know what will happen even if this really looks like a classic ‘unwanted baby’ story.
How this plays out should be interesting and even possibly an investment opportunity, so do your homework!