MeriStar Hospitality Operating Partnership, L.P. Commences Cash Tender Offers and Related Consent Solicitations for Outstanding
March 29 2006 - 7:30AM
PR Newswire (US)
BETHESDA, Md., March 29 /PRNewswire-FirstCall/ -- MeriStar
Hospitality Corporation (NYSE:MHX) announced today that its
subsidiary MeriStar Hospitality Operating Partnership, L.P. (the
"Operating Partnership") had commenced cash tender offers for any
and all of the Operating Partnership's outstanding 9% Senior Notes
due 2008 (CUSIP No. 58984YAD5) and 9 1/8% Senior Notes due 2011
(CUSIP No. 58984SAA4) (collectively, the "Notes"), as well as
related consent solicitations to amend such Notes and the
indentures pursuant to which they were issued. The tender offers
and consent solicitations are being conducted in connection with
the previously announced agreement of MeriStar and the Operating
Partnership to merge with affiliates of The Blackstone Group. The
consent solicitations will expire at 5:00 p.m., New York City time,
on Wednesday, April 12, 2006, unless extended or earlier terminated
by the Operating Partnership (the "Consent Expiration Date").
Tendered Notes may not be withdrawn and consents may not be revoked
after the Consent Expiration Date. The tender offers will expire at
8:00 a.m., New York City time, on Tuesday, May 2, 2006, unless
extended or earlier terminated by the Operating Partnership (the
"Offer Expiration Date"). Holders tendering their Notes will be
required to consent to proposed amendments to the Notes and to the
indentures governing the Notes, that will eliminate substantially
all of the restrictive covenants contained in the indentures and
the Notes (except for certain covenants related to asset sales and
change of control offers), eliminate certain events of default and
modify covenants regarding mergers, including to permit mergers
with entities other than corporations, and modify provisions
regarding defeasance and/or satisfaction and discharge to eliminate
certain conditions, and modify or eliminate certain other
provisions contained in the indentures and the Notes. Holders may
not tender their Notes without also delivering consents or deliver
consents without also tendering their Notes. The total
consideration for each $1,000 principal amount of Notes validly
tendered and not withdrawn pursuant to the tender offers is the
price (calculated as described in Schedule I to the Offer to
Purchase referred to below) equal to (i) the sum of (a) the present
value, determined in accordance with standard market practice, on
the payment date for Notes purchased in the tender offers of $1,000
payable on the applicable maturity date for the Notes plus (b) the
present value of the interest that accrues and is payable from the
last interest payment date prior to the payment date until the
applicable maturity date for the Notes, in each case determined on
the basis of a yield to such maturity date equal to the sum of (A)
the yield to maturity (the "Reference Yield") on the applicable
U.S. Treasury Security specified below (the "Reference Security"),
as calculated by Bear, Stearns & Co. Inc. in accordance with
standard market practice, based on the bid-side price of such
Reference Security as of 2:00 p.m., New York City time, on the
eleventh business day immediately preceding the Offer Expiration
Date, as displayed on the applicable page of the Bloomberg
Government Pricing Monitor specified in the table below or any
recognized quotation source selected by Bear, Stearns & Co.
Inc. in its sole discretion if the Bloomberg Government Pricing
Monitor is not available or is manifestly erroneous, plus (B) 50
basis points, minus (ii) accrued and unpaid interest to, but not
including, the payment date (in each case, the "Total
Consideration"). The Total Consideration includes a consent payment
of $30.00 per $1,000 principal amount of Notes payable in respect
of Notes validly tendered and not withdrawn and as to which
consents to the proposed amendments are delivered on or prior to
the Consent Expiration Date (the "Consent Payment"). Holders of the
Notes must validly tender and not withdraw Notes on or prior to the
Consent Expiration Date in order to be eligible to receive the
Total Consideration for such Notes purchased in the tender offers.
Holders who validly tender their Notes after the Consent Expiration
Date and on or prior to the Offer Expiration Date will be eligible
to receive an amount, paid in cash, equal to the Total
Consideration less the Consent Payment. In each case, Holders whose
Notes are accepted for payment in the Offers shall receive accrued
and unpaid interest in respect of such purchased Notes from the
last interest payment date to, but not including, the payment date
for Notes purchased in the tender offers. The following table
summarizes certain terms of the tender offers. Aggregate Principal
Relevant Amount Security Reference Bloomberg CUSIP No. Outstanding
Description Security Page 58984YAD5 $245,058,000 9% Senior Notes
4.375% US BBT4 due 2008 Treasury Note due 12/31/07 58984SAA4
$342,665,000 9 1/8% Senior 4.325% US BBT6 Notes due 2011 Treasury
Note due 1/15/11 The tender offers and consent solicitations are
made upon the terms and conditions set forth in the Offer to
Purchase and Consent Solicitation Statement, dated March 29, 2006
(the "Offer to Purchase"), and the related Consent and Letter of
Transmittal. The tender offers are subject to the satisfaction of
certain conditions, including receipt of consents sufficient to
approve the proposed amendments and the mergers having occurred, or
shall be occurring, substantially concurrent with the Offer
Expiration Date. Further details about the terms and conditions of
the tender offers and the consent solicitations are set forth in
the Offer to Purchase. The Operating Partnership has retained Bear,
Stearns & Co. Inc. and Lehman Brothers Inc. to act as the
Dealer Managers for the tender offers and Solicitation Agents for
the consent solicitations and they can be contacted at (877)
696-BEAR (toll-free) and (800) 438-3242 (toll-free), respectively.
The documents relating to the tender offers and consent
solicitations are expected to be distributed to holders beginning
today. Requests for documentation may be directed to D.F. King
& Co., Inc., the Information Agent, which can be contacted at
(212) 269-5550 (for banks and brokers only) or (888) 644-5854 (for
all others toll-free). This release is for informational purposes
only and is neither an offer to purchase nor a solicitation of an
offer to sell the Notes. The offer to buy the Notes is only being
made pursuant to the tender offer and consent solicitation
documents, including the Offer to Purchase that the Operating
Partnership is distributing to holders of Notes. The tender offers
and consent solicitations are not being made to holders of Notes in
any jurisdiction in which the making or acceptance thereof would
not be in compliance with the securities, blue sky or other laws of
such jurisdiction. In any jurisdiction in which the tender offers
or consent solicitations are required to be made by a licensed
broker or dealer, they shall be deemed to be made by Bear, Stearns
& Co. Inc. or Lehman Brothers Inc. on behalf of the Operating
Partnership. Safe Harbor Statement This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements, which are based on various
assumptions and describe our future plans, strategies and
expectations, are generally identified by our use of words such as
"intend," "plan," "may," "should," "will," "project," "estimate,"
"anticipate," "believe," "expect," "continue," "potential,"
"opportunity," and similar expressions, whether in the negative or
affirmative. We cannot guarantee that we actually will achieve
these plans, intentions or expectations. All statements regarding
our expected financial position, business and financing plans are
forward- looking statements. Except for historical information,
matters discussed in this press release are subject to known and
unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements to be materially
different from future results, performance or achievements
expressed or implied by such forward-looking statements. Factors
which could have a material adverse effect on our operations and
future prospects include, but are not limited to: economic
conditions generally and the real estate market specifically;
supply and demand for hotel rooms in our current and proposed
market areas; other factors that may influence the travel industry,
including health, safety and economic factors; competition; the
level of proceeds from asset sales; cash flow generally, including
the availability of capital generally, cash available for capital
expenditures, and our ability to refinance debt; the effects of
threats of terrorism and increased security precautions on travel
patterns and demand for hotels; the threatened or actual outbreak
of hostilities and international political instability;
governmental actions, including new laws and regulations and
particularly changes to laws governing the taxation of real estate
investment trusts; weather conditions generally and natural
disasters; rising insurance premiums; rising interest rates; and
changes in U.S. generally accepted accounting principles, policies
and guidelines applicable to real estate investment trusts. These
risks and uncertainties should be considered in evaluating any
forward-looking statements contained in this press release or
incorporated by reference herein. All forward-looking statements
speak only as of the date of this press release or, in the case of
any document incorporated by reference, the date of that document.
All subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are qualified
by the cautionary statements in this section. We undertake no
obligation to update or publicly release any revisions to
forward-looking statements to reflect events, circumstances or
changes in expectations after the date of this press release. This
communication is being made in respect of the proposed merger
transaction involving MeriStar and affiliates of The Blackstone
Group. In connection with the proposed transaction, MeriStar has
filed a definitive proxy statement with the Securities and Exchange
Commission. Before making any voting or investment decision,
shareholders are urged to read the definitive proxy statement
carefully and in its entirety as it contains important information
about the proposed transaction. The definitive proxy statement has
been mailed to MeriStar shareholders. In addition, the definitive
proxy statement and other documents are available free of charge at
the Securities and Exchange Commission's Internet Web site,
http://www.sec.gov/. The definitive proxy statement and other
pertinent documents also may be obtained for free at MeriStar's Web
site, http://www.meristar.com/ , or by contacting Kevin Welch,
Senior Vice President and Treasurer, MeriStar Hospitality,
telephone (301) 581-5926. MeriStar and its directors and officers
and other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect to the
proposed transactions. Information regarding MeriStar's directors
and executive officers is detailed in its proxy statements and
annual reports on Form 10-K, previously filed with the SEC, and the
definitive proxy statement relating to the proposed transactions.
Contact: Kevin J. Welch Jerry Daly or Carol McCune MeriStar
Hospitality Daly Gray Public Relations (Media) (301) 581-5926 (703)
435-6293 DATASOURCE: MeriStar Hospitality Corporation CONTACT:
Kevin J. Welch of MeriStar Hospitality, +1-301-581-5926; Jerry Daly
or Carol McCune, both of Daly Gray Public Relations (Media), for
MeriStar Hospitality, +1-703-435-6293 Web site:
http://www.meristar.com/
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