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UPDATE 1-Wyndham to sell European vacation rental business for $1.3 bln

(Adds detail on the deal, background)

Feb 15 (Reuters) - Wyndham Worldwide Corp will sell its European vacation rental business to private equity firm Platinum Equity for about $1.3 billion, the U.S. hotelier said on Thursday, six months into a strategic review process for the business.

Wyndham said last August it would split into two publicly traded companies Wyndham Hotel Group and Wyndham Vacation Ownership - and explore alternatives for the European holiday rentals business.

The review process "generated strong interest from multiple parties" before the company signed a deal with Platinum Equity, Wyndham Chief Executive Officer Stephen Holmes said in a statement.

The European vacation rental business operates several local brands, including cottages.com, James Villa Holidays and Landal GreenParks, and generates about $750 million in annual revenue, Wyndham said.

The business will pay a royalty fee of 1 percent of net revenue to Wyndham's hotel business under a 20 year agreement, for the right to use the 'by Wyndham Vacation Rentals' endorser brand.

Deutsche Bank and Goldman Sachs advised Wyndham, while Bank of America Merrill Lynch is leading the financing for Platinum Equity. (Reporting by Sanjana Shivdas in Bengaluru; Editing by Savio D'Souza)