---

Chicago's Pritzker family has recruited two prominent outside investors to pay a total of $1 billion for a minority stake in its closely held Hyatt hotel chain, raising funds to distribute to various relatives as part of a plan to divide up the family's huge empire.

Goldman Sachs Capital Partners, a private-equity affiliate of the giant investment bank, and Madrone Capital Partners, which is affiliated with Rob Walton, chairman of Wal-Mart Stores Inc. and other members of his family, each are investing $500 million in Global Hyatt Corp. Each firm will get an undisclosed "equity-linked" stake and a seat on Hyatt's board.

The Pritzkers are in the middle of a decade-long process to split up the family's assets among 11 adult cousins by 2011. The agreement, reached after intense internal feuding, calls for regular cash distributions to be made to each party, including $75 million apiece in 2006.

A trio of family members running the core empire on a day-to-day basis has been engaged in a delicate balancing act, to grow the family holdings while finding ways to divide the assets and raise cash for the distributions. Besides Hyatt, the Pritzkers control the Marmon Group industrial conglomerate, the TransUnion credit-checking business and extensive real-estate holdings. The empire is estimated to be worth at least $20 billion. Last year the Pritzkers sold a smokeless tobacco company for $3.5 billion.

Thomas Pritzker, chairman of Hyatt, said in an interview that the family has been "trying to build Global Hyatt into a worldwide, world-class player in the hospitality industry. And we're also trying restructure the family entity. This transaction supports both of those goals at the same time." One key to the transaction, he said, was that it raised cash while maintaining Hyatt's capital base, allowing the chain to continue to grow. He also said the new investors bring important experience and contacts to Hyatt's board.

There has been speculation that the Pritzkers would seek liquidity through an initial public offering of Hyatt's stock. Mr. Pritzker said the family still hasn't decided whether to do an IPO.

Hyatt has been a mid-sized player focused on full-service hotels in an industry increasingly dominated by giants with multiple brands such as Marriott International Inc. and Hilton Hotels Corp. The Pritzkers launched an aggressive expansion plan several years ago, moving Hyatt into limited-service and extended-stay hotels with acquisitions and new brands. The company also is planning to add 65 full-service hotels, most outside the U.S., to its current portfolio of 213.

As part of the transformation, Mark Hoplamazian, a longtime key Pritzker executive, was named CEO of Hyatt last year.

---

---

---