Jin Jiang Hotels' Joint Venture with US-based Thayer Lodging to Acquire Interstate Hotels & Resorts
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Jin Jiang Hotels' Joint Venture with US-based Thayer Lodging to Acquire Interstate Hotels & Resorts
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Category: Worldwide - Industry economy
- New brands / Affiliations
This is a press release selected by our editorial committee and published online for free on 2009-12-22
To propel Jin Jiang to the international stage and to cement its leading industry status
Shanghai Jin Jiang International Hotels (Group) Company Limited ("Jin Jiang Hotels"; together with its subsidiaries, the "Group"; SEHK stock code: 02006), a leading hotel operator and manager in China, is pleased to announce today that the joint venture, named Hotel Acquisition Company, LLC ("HAC"), which is set up by Jin Jiang Hotels and an investment fund sponsored by a US-based real estate investment firm Thayer Lodging Group ("Thayer"), has entered into a Merger Agreement ("Agreement") with Interstate Hotels & Resorts Inc. ("NYSE : IHR") and Interstate Operating Company, L.P. (Collectively, "Interstate"), to merge Interstate and to turn them into wholly owned subsidiaries of HAC. Interstate is the US's largest independent hotel management company and a leading hotel real estate investor. The move is set to propel Jin Jiang Hotels to the international stage and to cement its industry leading status.
Under the terms of the Agreement, HAC will acquire all outstanding common stock and operating partnership units in Interstate. The acquisition is to be made at a price of US$2.25 per share in cash and involves assumption of all the outstanding debt of Interstate subject to certain paydowns. Upon the effective time of the merger, HAC shall pay approximately USD75.30 million to hold all equity interests in Interstate. The transaction is valued at approximately US$307 million. The merger is expected to close in the first quarter of 2010, pending Interstate's shareholder approval and satisfaction or waiver of other customary closing conditions. Jin Jiang Hotels has obtained the necessary and required approvals from relevant PRC Government bodies.
Renowned in the hotel industry, Interstate has a management portfolio of 232 hospitality properties with more than 46,000 rooms in 37 states in US, the District of Columbia, Russia, India, Mexico, Belgium, Canada, Ireland and England. The company has ownership interests in 56 of those properties, including six wholly owned assets.
Commenting on the joint venture partnership and the acquisition of Interstate, Leland C. Pillsbury, Thayer's co-chairman, said: "Interstate offers a unique platform with in-depth industry expertise, international operations, and scope of experience gained over 50 years, along with a stellar reputation as a first-rate operator." Frederic V. Malek, Thayer's co-chairman, added: "We look forward to working with Interstate's management team and associates, their owners and partners as we build on the company's impressive legacy of success."
Mr. Yu Minliang, Chairman of Jin Jiang Hotels, said: "Interstate has a global reputation as a world-class, independent hotel operator. This acquisition significantly accelerates our ability to expand internationally, giving us immediate access to a worldwide platform. We also expect to mutually benefit from our global relationships in the hospitality industry, making Jin Jiang and Interstate stronger."
UBS Investment Bank served as financial advisor to Jin Jiang Hotels and BofA Merrill Lynch served as financial advisor to Thayer. Baker & McKenzie LLP served as Jin Jiang Hotel's legal advisor and Hogan & Hartson LLP served as Thayer's legal advisor.
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