Marriott Corp. stunned investors with an announcement yesterday that it plans to buy up to 11 million shares of its own common stock at $22 a share. A purchase in such numbers would represent a buy-back of about one-third the outstanding shares.
In addition, the local company revealed yesterday that an unspecified number of its hotel properties may be sold in the near future -- which would generate cash to buy some of the shares.
On a heavy volume of 214,900 shares, Marriott climbed $2.25 a share to $21.75 -- a new high for the past year. Marriott said it will buy any and all tendered shares up to a 5 million limit and will reserve the right to buy additional shares "but in no event . . . more than 11 million shares."
A company announcement said that a decision to buy more than 5 million shares "will be affected by numerous factors, including whether a contemplated sale of certain hotel properties to an institutional investor is successfully negotiated."
Marriott also said the stock purchase offer would commence in about 10 days, subject to various conditions, including approval by the Securities and Exchange Commission. The offer will be open for 20 days, and will be made to current stockholders through an offering circular to be mailed, Marriott said.