MeriStar Hospitality Corporation (NYSE:
MHX), one of the nation’s largest hotel real estate investment trusts (REIT), today announced
that it has signed a merger agreement to be acquired by an affiliate of The Blackstone Group in a
transaction valued at approximately $2.6 billion. In the mergers contemplated by the merger
agreement, each share of MeriStar common stock and each unit of limited partnership interest in
MeriStar Hospitality Operating Partnership, L.P., MeriStar’s operating partnership, will be
converted into the right to receive $10.45 in cash. The $10.45 per-share consideration represents
a 20 percent premium over MeriStar’s closing stock price on November 10, 2005, the date prior
to published reports regarding a potential acquisition of MeriStar.
The board of directors of MeriStar has unanimously approved the merger agreement and
has recommended the approval of the transactions by MeriStar’s stockholders. Stockholders will
be asked to vote on the proposed transactions at a special meeting that will be held on a date to
be announced. The mergers are expected to close in the second quarter of 2006, pending
stockholder approval and other customary closing conditions. Completion of the mergers is not
subject to receipt of financing by Blackstone.
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Blackstone to Acquire MeriStar
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“We are pleased to have entered into this agreement and believe that the transaction
represents attractive value to our shareholders” said Paul Whetsell, MeriStar’s chairman and
CEO.
Jonathan D. Gray, senior managing director of The Blackstone Group, said “We are
excited to acquire the company. We look forward to working with MeriStar’s franchisors,
managers and partners.”
MeriStar remains on track to close its previously announced sale of nine hotels and one
golf and tennis club to affiliates of The Blackstone Group during the first quarter 2006.
Bear, Stearns & Co. Inc. and Morgan Stanley acted as financial advisors to Blackstone.
Acquisition financing is being provided by Bear Stearns, Bank of America and Merrill Lynch.
Lehman Brothers Inc. acted as financial advisor to MeriStar. Simpson Thacher & Bartlett LLP
acted as legal advisor to Blackstone. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as
legal advisor to MeriStar. Miles & Stockbridge P.C. acted as Maryland counsel to Blackstone,
and Venable LLP acted as Maryland counsel to MeriStar.
