Marriott, Gaylord Deal in Trouble?

Shareholders of Gaylord Entertainment are scheduled to vote next month on a $210 million sale of the company's brand and hotel management rights to Marriott International. The deal, however, appears to have encountered a major roadblock: Shareholder TRT Holdings of Irving, Texas — a private holding company that owns Omni Hotels and Gold's Gym International, as well as a 21.8 percent stake in Gaylord — has written a letter to its fellow shareholders opposing the transaction.

"The Marriott agreement is biased in favor of Marriott and appears to have been poorly negotiated by Gaylord," reads the letter, signed by TRT President James Caldwell. "The value and marketability of the Gaylord properties will be significantly impaired by the Marriott agreement … Rejecting the proposed transaction and continuing to operate in the current format, with streamlined operations and a robust growth strategy, is the best alternative for future stockholder value creation and the preservation of options for future value-creating transactions."

Despite the objection from TRT — its largest shareholder — Gaylord remains committed to the Marriott deal.

"We were surprised by TRT's letter given TRT's involvement in every stage of the process, including participating in the bidding process for the management contracts and exploring an offer to acquire Gaylord Entertainment," said Gaylord Entertainment Chairman and CEO Colin Reed. "We believe TRT's actions represent an attempt to derail a process that is in the best interests of all of our stockholders … We look forward to our stockholders having the opportunity to formally consider the proposed transaction at our upcoming stockholder meeting. The board of directors and the company remain committed to producing the best value for stockholders and believe that the proposed transaction does so. We will continue to guard against the efforts of any third party to seize control of our company without paying a full and fair price to all stockholders."

Marriott CEO Arne Sorenson also responded to TRT's letter: "This was an intensely competitive set of negotiations in which we agreed to a set of legal and economic terms that we believe are fair to both parties, deliver real value to both, and in Marriott's view, represent the lengths to which we were willing to go to obtain the rights to manage an extraordinary, one-of-a-kind group of assets."

If shareholders approve the Marriott deal, Gaylord will become a real estate investment trust and will therefore retain ownership of its properties: the Gaylord National Resort & Convention Center, just outside of Washington, D.C.; the Gaylord Opryland in Nashville; the Gaylord Palms in Kissimmee, Fla.; and the Gaylord Texan in Grapevine, Texas. Marriott, however, will acquire the Gaylord brand and will assume management of all four properties for an initial term of 35 years.