hospitalitystyle.com

(October 2009) posted on Mon Oct 19, 2009 EDT

Amended filing says Pritzker disagreements could disrupt business

The ongoing strife within the Pritzker family – which controls Hyatt Hotels Corp. -- has surfaced in recent revisions to the prospectus for Hyatt's planned initial public offering. According to The Wall Street Journal, prospectus amendments filed last week with the Securities and Exchange Commission include a section which warns that new family disagreements “may arise or continue in the future” and could “disrupt our business.”

Hyatt Hotels plans to sell $1.15 billion of stock in an IPO. In connection with that offering, a dispute arose over restrictions on what family members could do with their shares, according to the amendments. As a result, some of the restrictions were loosened, so that family members will be able to sell up to 25 percent of their Hyatt holdings each 12 months, instead of the 20 percent originally contemplated. The prospectus amendment says that allowing the Pritzkers to sell their shares more quickly could have a negative affect on Hyatt's stock price.

The Journal reports another apparent bone of contention involves the role of Penny Pritzker as one of Hyatt's "independent" directors. Ms. Pritzker has been heavily involved in running other family companies, some of which do business with Hyatt. She is also a first cousin of Hyatt's executive chairman, Thomas Pritzker, who is one of three trustees of family trusts and the only other family member on the board.

The revised IPO limits some of Ms. Pritzker's powers on the board. Under the original IPO filing, Ms. Pritzker was to have a role in deciding how other family members voted their shares on company matters and would have held veto power over any effort to increase further the annual allotment of stock that Pritzkers could sell. Under the revised plan, she no longer has those roles.