Gaylord Entertainment Company - Conversion To Real Estate

Conversion To Real Estate

In May 2012, Marriott International agreed to purchase the Gaylord Hotels division and the rights to manage Gaylord's four hotels, the General Jackson Showboat, the Wildhorse Saloon, and Gaylord Springs Golf Links for $210 million in cash. The company changed its name from Gaylord Entertainment to Ryman Hospitality Properties when the deal was finalized in October. According to Chairman and CEO Colin Reed, Ryman will continue to operate and manage the Grand Ole Opry, Ryman Auditorium and WSM-AM for the time being, stating that they are "iconic" assets. The conversion cost more than 300 corporate employees their jobs with the company. The purchase came just as the poison pill put forth by the board of directors expired, opening the company up for a hostile takeover.

Robert Rowling, the Texas billionaire who owns TRT Holdings, bought 14 percent of Gaylord stock in early 2008. Later that year, Gaylord rejected Rowling's bid to increase TRT's stake to 30 percent, saying there would be no benefit to the company and also noting TRT's potential conflict of interest, since TRT owns the Omni Hotel chain, which competes with Gaylord for conference and convention business. In management's effort to see the Marriott plan to succeed, the company paid $185 million on August 7, 2012 for almost half of the shares owned by billionaire Robert Rowling and launched an offering to help him dispose of his remaining 5.6 million shares. Rowling had previously opposed the Marriott purchase saying, "The company can go on a diet without having surgery. We would rather see Gaylord maintain the status quo and implement the savings without permanently impairing the value of the Gaylord Properties by encumbering them with the onerous, long term Marriott Agreement."