Marriott Moves a Step Closer to Split
WASHINGTON (AP) _ A favorable ruling from the Internal Revenue Service will allow Marriott Corp. to go ahead with plans to split into two companies, the company said Tuesday.
The IRS ruled that a special company dividend that will trigger the Oct. 8 split will be tax free.
Marriott’s board of directors is scheduled to meet Wednesday to decide whether the special dividend meets all the conditions set for the breakup, including the receipt of the IRS ruling.
If the board approves the dividend, it will be distributed Oct. 8 to shareholders of record at the close of businesses on Sept. 30.
Under the special dividend, shareholders would receive one share of Marriott International Inc., a profitable hotel management company, for each share they own in Marriott Corp. Marriott would be renamed Host Marriott Corp., a new company that would own hotels and retirement communities and operate airport and toll-road concessions.
Host Marriott will take on most of Marriott Corp.’s $2.9 billion debt.
Marriott Corp. shareholders overwhelmingly approved the breakup plan in July.
Marriott Corp., based in Bethesda, Md., is one the nation’s leading hotel operators. It owns or manages 737 hotels under the Marriott, Courtyard, Residence Inn and Fairfield names.
Approval of the plan, which Marriott Chairman J.W. ″Bill″ Marriott Jr. called ″the most dramatic change in the 66-year history of Marriott Corp.,″ capped a protracted legal struggle to spin off Marriott’s debt.