NASHVILLE, Tenn. (AP/NewsChannel 5) - Gaylord Entertainment said it has agreed to sell its hotel brand and the rights to manage its four hotels to Marriott for $210 million in cash.
Under the agreement, Nashville-based Gaylord Entertainment Co. will continue to own its hotel properties and other businesses.
Terms of the 35-year deal will require Marriott to manage the four Gaylord hotels, including the Gaylord Opryland Hotel, under the Gaylord Hotels flag.
Gaylord will reorganize as a real estate investment trust effective January 1.
The deal stems from Gaylord's months-long review of strategic options. Its shares climbed 13 percent in premarket trading to $39 per share.
Gaylord said Marriott International Inc.'s presence in the hotel industry will help it cut costs and boost revenue. Annual savings are expected to total between $33 million and $40 million.
Gaylord CEO Colin Reed said that an "inefficiency of cost structure" led them to the decision. He said it is part of a plan to avoid a takeover and maintain their reputation.
Reed said Gaylord, as a Real Estate Investment Trust, or REIT, would look for additional opportunities for investment.
Gaylord said it will continue to own and operate the Grand Ole Opry, Ryman Auditorium and other attractions as taxable real estate investment trust subsidiaries.
The company said it will no longer view large scale development as a means for growth and will not proceed with a project in Colorado. They plan to re-examine how it could be completed with minimal financial commitment by Gaylord during the development phase.
The other Gaylord properties are located in Grapevine, Texas; Kissimmee, Florida; and Prince George's County, Maryland.
(The Associated Press Contributed To This Report.)