FBR Capital Maintains an 'Outperform' on Hyatt Hotels (H); Repurchasing 9M Class B Shares - Helps Remove an Overhang

FBR Capital maintains an 'Outperform' on Hyatt Hotels (NYSE: H).

FBR analyst says, "In a surprise move, this morning Hyatt announced that the company has agreed to repurchase nearly 9M of the class B shares from trusts of Pritzker family members. The shares will be repurchased at $44.03/share for an aggregate purchase price of nearly $396M and represents 5.2% of the company’s total shares outstanding...To this end, we believe that today’s announcement will likely be viewed favorably by the Street since the stock being repurchased will be retired by H, reducing the total number of shares outstanding to about 165M shares from 175M, previously."

"We believe the repurchases are accretive to EPS by $0.01/share in 2011 and $0.02/share in 2012. While the share repurchase is mildly accretive to earnings, we believe the repurchase removes an overhang on the stock, which was the concern that potential insider sales could drag down the share price."

For more ratings news on Hyatt Hotels click here and for the rating history of Hyatt Hotels click here.

Shares of Hyatt Hotels closed at $44.03 yesterday.

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