Ryman Hospitality Properties’ Buyback Plan
Ryman Hospitality Properties‘ directors have voted in favor of a share repurchase program of up to $100 million to buy back some of the company’s debt, reports nashvillepost.com. They also revealed how they will determine dividend payments after RHP’s conversion to a real estate investment trust.
Ryman Hospitality Properties (formerly Gaylord Entertainment) will use cash on hand and revolving debt to fund the buyback plan. Ryman officials plan to use their revolving credit line to redeem $152 million of debt that would have matured in 2014. That purchase should be completed by mid-January.
In a statement, Ryman Chairman, President and CEO Colin Reed said Ryman’s shareholder value priorities are first dividends, then buybacks and acquisitions. Regarding the first of those items, the board said it will decree quarterly dividends that are the greater of one of two numbers: 50 percent of adjusted funds from operations or all of REIT taxable income.
“We are putting in place a capital allocation policy that we believe is in the best interest of our shareholders and our business,” Reed said via a statement. “We believe establishing a sustainable dividend policy and using additional capital to repurchase our shares represents the right strategic use of capital given our present trading multiple and hotel valuation. These actions reflect the strength of our balance sheet and our continued confidence in the stability and cash flow generation capabilities of our business model.”
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