The former Marriott Corp. is headed for another split. This time Host Marriott Corp. plans to spin off its business that operates food and retail outlets at highway rest stops, airports and sports arenas.
The company said its hotel real-estate business will keep the name Host Marriott Corp.Host Marriott has been considering selling the airport and toll-road concession business to focus on the hotel real estate side of the operation, which company executives believe has potential for more growth.
The company plans to issue a special dividend that would give Host Marriott shareholders one share in Host Marriott Services for every five of their Host Marriott shares.
Last year, Host Marriott had revenues of $1.46 billion - $1.1 billion of it in the services division.
The split is subject to the approval of Host Marriott's board and a declaration by the Internal Revenue Service that the dividend will be tax-free to shareholders. The dividend is expected to be distributed in late 1995 or early 1996.
The announcement occurred three years after the original company, Marriott Corp., divided, spin-ning off its profitable hotel management operations into Marriott International Inc. and leaving Host Marriott with most of the company's real estate and $3 billion debt.
Host Marriott still has about $2.3 billion in long-term debt, and spokesman Nick Hill said only $400 million in debt issued by the travel plaza division earlier this year will go to the new company.
The further division of the company allows managers to seek different goals for two parts of the Host Marriott operations which had little overlap, said Camille Humphries, an analyst with Alex Brown & Sons in Baltimore.
William W. McCarten, president of the Host Marriott Operating Group, will become president and chief executive officer of Host Marriott Services.
If the spinoff goes through as planned, the services company will have operations at more than 70 domestic and international airports.