In a recent post I mentioned there are some interesting spins on the horizon, one of those is La Quinta Holdings (LQ) doing an OpCo/PropCo split sometime in Q2 2018. Their plans changed a little last week with the announcement that Wyndham Worldwide (WYN) - also doing an interesting spin - is buying La Quinta's asset-lite management company business for $1.71B in cash (after backing out $240MM Wyndham is reserving for potential taxes La Quinta will owe in the spinoff) or roughly 15.1x EBITDA.
Since Wyndham is paying cash, it's fairly easy to back into what value the market is assigning to La Quinta's PropCo spinoff, to be named CorePoint Lodging (CPLG). Today, La Quinta's enterprise value is roughly $3.83B and combined company has an estimated $331MM in EBITDA for 2017. Wyndham is paying $1.71B for the management company that will do $113MM in EBITDA, leaving an EV of $2.12B and $218MM in EBITDA behind in the REIT spinoff, for a 9.7x EBITDA multiple.
There are a lot of hotel REITs, here's a small sample of internally managed ones I pulled, they might not all be perfect comparable companies but as you can see, none of them trade below 10x EBITDA:
Disclosure: I own shares of LQ