A Texas billionaire who over the past week and a half spent $82 million to increase his stake in Gaylord Entertainment Co. to 14.1 percent of the company declared Monday that he does not intend to buy the hotel chain — at least for now.
In a filing with the Securities and Exchange Commission, Robert B. Rowling's Irving, Texas-based TRT Holdings indicated that the purchases were made for investment purposes. The disclosure was required after TRT pushed its holdings of Gaylord stock past 5 percent.
Ben Silverman, director of research at InsiderScore.com, said the filing left the door open for Rowling, who owns Omni Hotels, to enter into a strategic partnership with Gaylord. But it could also be that Rowling simply "identified an investment in a space he's familiar with and saw that it was undervalued," Silverman said.
Gaylord's stock closed up 6 percent at $29.98 a share in trading on the New York Stock Exchange on Monday.
Silverman said it's been hard to read what Rowling has in mind for Gaylord, since he has a limited record of investments, despite being listed as No. 49 on the 2007 Forbes 400 list and ranking as the fifth-wealthiest person in Texas. Rowling's assets are estimated to be worth $6.4 billion.
In addition to Omni, Rowling owns a majority share of privately held Gold's Gym and has made sizable investments in Pogo Producing Co., a Texas oil company, and in Guaranty Financial Group Inc., an Austin, Texas-based savings and loan company.
Is joint venture possible?On Friday, a Gaylord spokesman confirmed that the company had had no contact with Rowling. But when company spokesman Brian Abrahamson was asked that question again on Monday, he declined to comment.
TRT representatives, meanwhile, were unavailable for comment.
Citi analyst Joshua Attie said one possible outcome is that TRT will become a joint venture capital partner, allowing Gaylord to accelerate unit growth and reduce its leverage, according to a report from The Associated Press.
For investors, Silverman said Rowling's stock purchases could signal a couple of things: one, that somebody may be trying to buy the company on the cheap, which would be a negative for long-term investors, or that the purchases help validate Gaylord's business model.
Based on Monday's SEC filing, it appears that Rowling owned nearly 5 percent of Gaylord's shares before May 9. Ownership over 5 percent would have triggered disclosure requirements through the SEC. Rowling's purchases now make him Gaylord's largest shareholder.
After hitting its 52-week low on July 14 at $19.30 a share, Gaylord's stock has risen nearly 40 percent through Monday's closing on Wall Street. But those prices remain sharply lower from where the stock has been over the past year. Shares hit a 52-week high of $59.89 on Aug. 9, 2007.
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