Winston Hotels Announces Termination of Contract to Acquire Tribeca Hilton Garden Inn
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Winston Hotels Announces Termination of Contract to Acquire Tribeca Hilton Garden Inn
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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 2007-06-18
Winston Hotels, Inc. (NYSE: WXH), a real estate investment trust ("REIT") and owner of premium limited-service, upscale extended-stay and full-service hotels, today announced that it terminated its contract to acquire the Tribeca Hilton Garden Inn and agreed to dismiss its pending action against the seller in exchange for a payment of $16 million. The company also extended the outside closing date under its contract to acquire the Chelsea Hilton Garden Inn.
In August 2006, the company announced that it had entered into definitive agreements to acquire two hotels under construction in New York City (one each in the Tribeca and Chelsea sections of Manhattan) for a purchase price of $55 million each. As previously disclosed in the company's periodic reports, the Tribeca hotel experienced construction delays and the company pursued legal action against the seller. On June 12, 2007, the company terminated its contract to acquire the Tribeca Hilton Garden Inn hotel and agreed to dismiss its pending action against the seller in exchange for a payment of $16 million. In addition, on June 12, 2007 the company extended the outside closing date under its contract to acquire the Chelsea Hilton Garden Inn hotel, which is under construction and expected to open in the third quarter of 2007. Acquisition of this hotel is subject to customary closing conditions.
Proposed Merger With an Affiliate of Inland American Real Estate Trust, Inc.
On April 2, 2007, the company, along with its operating partnership, WINN Limited Partnership, entered into a definitive agreement and plan of merger with Inland American Real Estate Trust, Inc. ("Inland American") and its wholly owned subsidiary, Inland American Acquisition (Winston), LLC ("IAA"), pursuant to which Inland American has agreed to purchase 100% of the outstanding shares of common stock and Series B preferred stock of the company. IAA will survive the merger. In the merger, each share of Winston's common stock will be converted into the right to receive $15.00 in cash. In addition, each share of Winston's Series B preferred stock will be converted into the right to receive $25.38 per share (or $25.44 per share if the effective time of the merger occurs prior to June 30, 2007) in cash, plus any accrued and unpaid dividends as of the effective time of the merger. Pursuant to the terms of the agreement and plan of merger with Inland American, dividends will not be paid on the common stock.
The company will hold a special meeting of its common shareholders on Thursday, June 21, 2007, at 10:00 a.m., Eastern time, at the Homewood Suites hotel located at 5400 Edwards Mill Road, Raleigh, North Carolina, to consider and vote upon the proposed merger. The company's board of directors has fixed the close of business on May 11, 2007, as the record date for determining the shareholders entitled to notice of and to vote at the special meeting and at any adjournments or postponements thereof.
The consummation of the merger is anticipated in the third quarter of 2007 and is subject to customary closing conditions including, among other things, the approval of the merger, the merger agreement, and the other transactions contemplated by the merger agreement by the affirmative vote of holders of at least a majority of the company's outstanding common stock. The closing of the merger is not subject to a financing condition.
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