CNL Hotels & Resorts, Inc. Agrees to Sell in a $6.6 Billion Transaction
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CNL Hotels & Resorts, Inc. Agrees to Sell in a $6.6 Billion Transaction
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Category: North America & West Indies / Carribean islands
This is a press release selected by our editorial committee and published online for free on 2007-01-24
CNL Hotels & Resorts, Inc. (“CHR” or the “Company”), the
nation’s second largest hotel real estate investment trust, announced today that it has signed a
definitive agreement to be acquired by Morgan Stanley Real Estate. The transaction provides that
funds managed by Morgan Stanley Real Estate will acquire CHR for $20.50 per share in cash,
representing an aggregate purchase price of approximately $6.6 billion for all of CHR’s outstanding
common stock and the assumption of CHR’s outstanding debt. In connection with this transaction
and included in the aggregate purchase price, CHR will sell 51 properties to Ashford Hospitality
Trust (NYSE:AHT) for proceeds of approximately $2.4 billion immediately prior to the transaction
with Morgan Stanley Real Estate.
Upon completion of this transaction, Morgan Stanley Real Estate will own a collection of the
country’s premier iconic lodging assets. The portfolio is comprised of eight luxury properties
located in six destination markets throughout the United States and operated under internationally
recognized brand names. The hotels include:
Three properties in Hilton’s Waldorf=Astoria Collection:
o The Grand Wailea Resort Hotel & Spa in Maui, Hawaii,
o The La Quinta Resort & Club and PGA West in La Quinta , California, and
o The Arizona Biltmore Resort & Spa in Phoenix, Arizona,
• And in addition:
o The Ritz-Carlton Orlando and JW Marriott Orlando at the Grande Lakes Resort,
o The Doral Golf Resort & Spa, a Marriott Resort in Miami, Florida,
o The JW Marriott Desert Ridge Resort & Spa in Phoenix, Arizona, and
o The Claremont Resort & Spa in Berkeley, California.
“This acquisition is a unique opportunity to acquire eight top-quality resort properties
diversified across key U.S. travel destinations,” said Michael Franco, Managing Director,
and Morgan Stanley Real Estate. “We believe that these types of luxury hotels are
extremely hard to replicate and will exhibit excellent future growth from increased
corporate group travel and leisure travelers seeking a one-of-a-kind experience.”
Thomas J. Hutchison III, CHR’s Chief Executive Officer, stated, “We believe our ability to
acquire great real estate, particularly focused in the luxury and upper-upscale segments, along
with our dedication to strong asset management, positioned the Company for this opportunity
to deliver value to our shareholders.”
The Transaction
Morgan Stanley Real Estate will pay CHR’s shareholders a consideration of $20.50 per share.
• The transaction has been unanimously approved by the Boards of Directors of CHR,
Morgan Stanley Real Estate and Ashford Hospitality Trust.
• The transaction is subject to the approval of CHR’s shareholders and other customary
closing conditions. The transaction is expected to close in the second quarter of 2007.
• Banc of America Securities LLC, UBS Investment Bank and Houlihan Lokey acted as
financial advisors to CHR on the transaction and Sidley Austin LLP and Venable LLP
acted as CHR’s legal counsel.
• Morgan Stanley advised Morgan Stanley Real Estate and Goodwin Procter LLP
provided legal counsel.
In connection with the proposed transaction, CHR will file with the Securities and Exchange
Commission (“SEC”) a Proxy Statement on Schedule 14A containing information and certain
documents regarding the proposed transaction in connection with approval of the transaction
by shareholders of CHR. Shareholders of CHR are urged to carefully read the Proxy Statement
and related documents in their entirety when they become available because they will contain
important information about the proposed transaction. CHR and its respective directors and
executive officers and other members of management may be deemed participants in the
solicitation of proxies in respect to the proposed transaction. Information regarding the
directors and executive officers of CHR is available in CHR’s Annual Report on Form 10-K for
the year ended December 31, 2005, which was filed with the SEC on March 31, 2006.
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