Equity Inns (NYSE:ENN)
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Equity Inns, Inc. (NYSE: ENN), the third largest hotel real estate
investment trust (REIT) based on the number of hotels owned, today
announced that it has entered into a definitive merger agreement under
which an affiliate of Whitehall Street Global Real Estate Limited
Partnership 2007 (“Whitehall”)
will acquire Equity Inns, Inc. in a transaction valued at approximately
$2.2 billion, including debt.
Under the terms of the agreement, Whitehall will acquire all of the
outstanding common shares of Equity Inns, Inc. for $23.00 per share in
cash. This represents a premium of approximately 28% over Equity Inns’
90 day average closing share price and a premium of approximately 19%
over Equity Inns’ closing price on June 20,
2007.
Equity Inns intends to pay its regular quarterly common share dividend
for the quarter ending June 30, 2007, as previously announced on June
14, 2007 and under the terms of the merger agreement, Equity Inns is
permitted to continue to pay regular quarterly dividends to shareholders
of up to $0.25 per share, plus a prorated dividend for any partial
quarter, prior to the closing of the transaction.
Howard A. Silver, Equity Inns’ President and
Chief Executive Officer stated, “After careful
and thorough analysis, our Board has endorsed this transaction with
Whitehall as being in the best interests of the Company and our
shareholders. The Board of Directors has unanimously adopted the
agreement and the merger and recommends that Equity Inns’
shareholders approve the agreement and the merger. We are pleased that
the offer provides compelling value and we look forward to working with
Whitehall to quickly complete the transaction.”
Jonathan Langer, Managing Director of Goldman, Sachs’
Real Estate Principal Investment Area commented, “We
are truly excited to add Equity Inns’ hotel
assets to our real estate portfolio. Equity Inns’
strategy of aligning itself with the leading brands in the lodging
industry has proven highly effective. The Company has demonstrated a
solid ability to create value and has strategically positioned itself as
a leader in its industry.”
The transaction is subject to certain closing conditions, including the
approval of Equity Inns’ shareholders of the
agreement and the merger and the satisfaction of other customary closing
conditions. There is no financing condition to complete the transaction.
The transaction is expected to close promptly following the satisfaction
of all closing conditions, which is anticipated to occur in the fourth
quarter of 2007.
Pursuant to the terms of the merger agreement, each holder of units of
limited partnership interest in the Company’s
operating partnership will receive $23.00 per unit in cash and the
Company’s Series B and Series C Preferred
stock will be converted into shares of preferred stock of the acquiring
entity which will have identical dividend and other relative rights,
preferences, limitations and restrictions as are provided in the Company’s
Series B and Series C Preferred stock.
Merrill Lynch & Co. is acting as the exclusive financial advisor to
Equity Inns and Hunton & Williams LLP is the Company’s
legal counsel. For Whitehall, Goldman, Sachs & Co. is the exclusive
financial advisor and Sullivan & Cromwell LLP is serving as legal
advisor.
About Equity Inns
Equity Inns, Inc. is a self-advised REIT that focuses on the upscale
extended stay, all-suite and midscale limited-service segments of the
hotel industry. The Company, which ranks as the third largest hotel REIT
based on number of hotels owned, currently owns 132 hotels with 15,731
rooms located in 35 states. For more information about Equity Inns,
visit the Company's Web site at www.equityinns.com.
About Whitehall
Since 1991, Goldman, Sachs & Co. (“Goldman
Sachs”), through the Whitehall Street Real
Estate Funds, has raised over $20.0 billion of discretionary equity
capital across 10 funds and has acquired assets that represent a cost
basis of approximately $60.0 billion.
Forward Looking Statements
Certain matters discussed in this press release which are not historical
facts are “forward-looking statements”
within the meaning of the federal securities laws and involve risks and
uncertainties. The words “may,”
“plan,” “project,”
“anticipate,” “believe,”
“estimate,” “forecast,
“expect,” “intend,”
“will,” and
similar terms are intended to identify forward-looking statements, which
include, without limitation, statements concerning our outlook for the
hotel industry, acquisition and disposition plans for our hotels and
assumptions and forecasts of future results for fiscal year 2007.
Forward-looking statements are not guarantees of future performance and
involve numerous risks and uncertainties which may cause our actual
financial condition, results of operations and performance to be
materially different from the results of expectations expressed or
implied by such statements. Completion of the proposed merger, general
economic conditions, future acts of terrorism or war, risks associated
with the hotel and hospitality business, the availability of capital,
risks associated with our debt financing, hotel operating risks and
numerous other factors, may affect our future results and performance
and achievements. These risks and uncertainties are described in greater
detail in our 2006 Annual Report on Form 10-K filed on February 28,
2007, and our other periodic filings with the United States Securities
and Exchange Commission (SEC). We undertake no obligation and do not
intend to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise.
Although we believe our current expectations to be based upon reasonable
assumptions, we can give no assurance that our expectations will be
attained or that actual results will not differ materially.
Important Information
In connection with the proposed merger, Equity Inns, Inc. will file a
proxy statement with the Securities and Exchange Commission. The proxy
statement will contain information about Equity Inns, Inc., the proposed
merger and related matters. SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT CAREFULLY WHEN IT IS AVAILABLE, AS IT WILL CONTAIN IMPORTANT
INFORMATION THAT SHAREHOLDERS SHOULD CONSIDER BEFORE MAKING A DECISION
ABOUT THE MERGER. In addition to receiving the proxy statement from
Equity Inns, Inc. by mail, shareholders will be able to obtain the proxy
statement, as well as other filings containing information about Equity
Inns, Inc., without charge, from the Securities and Exchange
Commission's website (http://www.sec.gov)
or, without charge, from Equity Inns, Inc. at www.equityinns.com
or by directing such request to Equity Inns, Inc., 7700 Wolf River
Boulevard, Germantown, TN 38138, Attention: Investor Relations.
Equity Inns, Inc. and its directors and executive officers and other
members of management and employees may be deemed to be participants in
the solicitation of proxies in respect of the merger. Information about
Equity Inns, Inc.’s directors and executive
officers and their ownership of Equity Inns, Inc.’s
common stock is set forth in the proxy statement for Equity Inns, Inc.’s
2006 Annual Meeting of Shareholders, which was filed with the SEC on
March 29, 2007 and Equity Inns, Inc.’s Annual
Report on Form 10K, which was filed with the SEC on February 28, 2007.
Shareholders may obtain additional information regarding the interests
of Equity Inns, Inc. and its directors and executive officers in the
merger, which may be different than those of Equity Inns, Inc.’s
shareholders generally, by reading the proxy statement and other
relevant documents regarding the merger, when filed with the SEC.