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Hilton Worldwide and Spinoffs Are Good Investments Now or Later

In February, iconic hospitality company Hilton Worldwide (HLT) said it would spin off its timeshare division, Hilton Grand Vacations, and also create a REIT called Park Hotels & Resorts consisting primarily of its third-party owned U.S. hotels.

Hilton Worldwide will complete the transactions by the end of 2016. All three companies will be publicly traded. Both spin-offs will maintain a long-term licensing agreement with Hilton Worldwide, and both transactions are tax-free. Recent legislative changes restrict tax tree REIT spin-offs, but Hilton's transaction is grandfathered in.

In announcing the moves, Hilton CEO Chris Nasetta said that he was looking to "unlock growth opportunities that are embedded...


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