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The Blackstone Group to Acquire Prime Hospitality Corp.
FAIRFIELD, N.J., Aug. 18 /PRNewswire-FirstCall/ -- Prime Hospitality Corp.
(NYSE:PDQ) announced today that it had signed a definitive agreement to be
acquired by affiliates of The Blackstone Group for $12.25 per share, a 42%
premium to the closing price on August 18th. The total value of the
transaction, including debt, is over $790 million. Prime Hospitality Corp.
(Prime) controls three hotel brands -- AmeriSuites, Wellesley Inns & Suites and
Prime Hotels and Resorts -- operating and franchising 256 hotels with 33,605
rooms. Of these hotels, it owns 112 comprising 14,183 rooms.
The Board of Directors of Prime approved the agreement in a special meeting
today. The transaction is subject to shareholder approval and other customary
conditions and is expected to be completed during the fourth quarter of 2004.
Blackstone plans to maintain the headquarters operations of Prime Hospitality
Corp. in Fairfield, NJ. In addition, Blackstone intends to convert 37 of the
owned Wellesley Inns & Suites, which were originally built as moderate price
extended stay hotels with kitchens, to one of its Extended Stay America brands.
In making the announcement, Attilio Petrocelli, Chairman and Chief Executive
Officer of Prime, commented, "The Board of Directors is pleased with the terms
of this acquisition and believes it is in the best interests of the Company's
shareholders. The Board is especially grateful to the excellent team of
associates in this organization."
Jonathan D. Gray, Senior Managing Director of The Blackstone Group, said, "We
are excited to be acquiring Prime Hospitality. Prime has an outstanding
collection of properties, brands and people. We look forward to working with
the organization, its franchisees and owner/partners."
A special shareholder meeting will be announced soon to obtain shareholder
approval.
In connection with the transaction, Prime will commence a tender offer and
consent solicitation relating to its 8.375% Senior Subordinated Notes due 2012
($178.7 million principal amount outstanding). Details with respect to this
tender offer and consent solicitation will be set forth in tender offer
documents, which will be furnished in due course to holders of the Notes.
The Company will host a conference call to discuss the transaction, which will
be held on August 19, 2004 at 10:00 a.m. The dial-in number is (800) 818-6592.
Bear, Stearns & Co. Inc. is serving as financial advisor to Prime and Banc of
America Securities LLC is serving as financial advisor for Blackstone. Bank of
America's CMBS Capital Markets Group is providing acquisition financing for the
transaction. Olshan Grundman Frome Rosenzweig & Wolosky LLP and Simpson Thacher
& Bartlett LLP acted as legal advisers to Prime and Blackstone, respectively.
About Prime Hospitality Corp.
Prime Hospitality Corp., one of the nation's premiere lodging companies, owns,
manages, develops and franchises more than 250 hotels throughout North America.
The Company owns and operates three proprietary brands, AmeriSuites(R) (all
suites), PRIME Hotels & Resorts(R) (full-service) and Wellesley Inns &
Suites(R) (limited service). Also within Prime's portfolio are owned and/or
managed hotels operated under franchise agreements with national hotel chains
including Hilton, Sheraton, Hampton, and Holiday Inn. Prime can be accessed
over the Internet at http://www.primehospitality.com/.
About The Blackstone Group
The Blackstone Group, a private investment firm with offices in New York,
London and Hamburg, was founded in 1985. Blackstone's Real Estate Group has
raised five funds, representing over $6 billion in total equity, and has a long
track record of investing in hotels and other commercial properties. In
addition to Real Estate, The Blackstone Group's core businesses include,
Private Equity, Corporate Debt Investing, Marketable Alternative Asset
Management, Mergers and Acquisitions Advisory, and Restructuring and
Reorganization Advisory. The Blackstone Group can be accessed on the Internet
at http://www.blackstone.com/.
Certain statements and information included in this release constitute
"forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance, or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied in such forward-looking statements. Additional discussion
of factors that could cause actual results to differ materially from
management's projections, forecasts, estimates and expectations is contained in
the Company's SEC filings.
In connection with the proposed merger, the Company will file a proxy statement
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the proxy statement (when available) and other documents filed by the
Company at the Securities and Exchange Commission's web site at
http://www.sec.gov/. The proxy statement and such other documents may also be
obtained for free from the Company by directing such request to the Company,
Attention: Rich Szymanski, Chief Financial Officer, 700 Route 46 East,
Fairfield, NJ 07004, Telephone: (973) 808-7751.
The Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation
of proxies from its shareholders in connection with the proposed merger.
Information concerning the interests of Company's participants in the
solicitation is set forth in the Company's proxy statements and Annual Reports
on Form 10-K, previously filed with the Securities and Exchange Commission, and
in the proxy statement relating to the merger when it becomes available.
DATASOURCE: The Blackstone Group; Prime Hospitality Corp.
CONTACT: Rich Szymankski of Prime Hospitality Corp., +1-973-808-7751; or
John Ford of The Blackstone Group, +1-212-583-5559
Web site: http://www.primehospitality.com/
http://www.blackstone.com/
Company News On-Call: http://www.prnewswire.com/comp/130238.html