La Quinta Completes Tax-Free Merger for REIT Restructuring

La Quinta Properties will function as a subsidiary in line with the December 2001 shareholders' approval. Stockholders will get paired securities of common stock on a one-for-one basis in the parent organization and Class B common stock in the subsidiary. It's all part of a REIT restructuring launched in mid-October to position the chain as a C Corp Officials previously told GlobeSt.com that Dallas-based La Quinta would fail to qualify for its REIT status without the change. The intention is to model the C Corp structuring after White Plains, NY-based Starwood Hotels & Resorts Worldwide Inc. In line with the restructuring, La Quinta is taking a one-time, $400-million, non-cash charge.

As with other hoteliers, La Quinta spent the better part of 2001 slashing debt and figuring out ways to reposition in a down market. Much of its future growth, officials have said, rests on the laurels of a franchise program in the US and for the first time outside its borders. La Quinta owns, operates or franchises more than 300 brands in 30 states. Canada, Mexico and South America rank at the top of the list, with La Quinta poised to set sail for Europe in two years.