Winston (NYSE:WXH)
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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.
About the Company
As of June 13, 2007, Winston Hotels owned or was invested in 50 hotel
properties in 18 states, having an aggregate of 6,782 rooms. This
included 42 wholly owned properties with an aggregate of 5,748 rooms, a
41.7% ownership interest in a joint venture that owned one hotel with
121 rooms, a 60% ownership interest in a joint venture that owned one
hotel with 138 rooms, a 49% ownership interest in a joint venture that
owned one hotel with 118 rooms, a 48.78% ownership interest in a joint
venture that owned one hotel with 147 rooms, a 13.05% ownership interest
in a joint venture that owned three hotels with an aggregate of 387
rooms, and a 0.21% ownership interest in a joint venture that owned one
hotel with 123 rooms for which substantially all of the profit or loss
generated by the joint venture is allocated to the company. As of March
31, 2007, the company had $29.5 million in loan receivables from owners
of several hotels. The company does not hold an ownership interest in
any of the hotels for which it has provided debt financing. For more
information about Winston Hotels, Inc., visit the company's web site at www.winstonhotels.com.
Additional Information about the Merger and Where to Find It
In connection with the proposed merger, the company has filed a
definitive proxy statement with the Securities and Exchange Commission
(SEC) and has provided shareholders as of the record date with a copy of
the definitive proxy statement. INVESTORS AND SECURITY HOLDERS OF THE
COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY, INLAND AMERICAN REAL ESTATE TRUST, INC.
AND THE PROPOSED MERGER. Investors can obtain the definitive proxy
statement and all other relevant documents filed by the company with the
SEC free of charge at the SEC's web site at www.sec.gov.
In addition, investors and security holders may obtain free copies of
the documents filed with the SEC by the company by contacting the company’s
Investor Relations at (919) 510-8003 or accessing the company’s
investor relations web site, www.winstonhotels.com.
Investors and security holders are urged to read the definitive proxy
statement and the other relevant materials before making any voting or
investment decision with respect to the merger.
The company and its executive officers, directors, and employees may be
deemed to be participating in the solicitation of proxies from the
security holders of the company in connection with the merger.
Information about the executive officers and directors of the company
and the number of company common shares beneficially owned by such
persons is set forth in the company’s Annual
Report on Form 10-K for the year ended December 31, 2006, which was
filed with the SEC on March 16, 2007, as amended by the company’s
Annual Report on Form 10-K/A, which was filed with the SEC on April 30,
2007. Investors and security holders may obtain additional information
regarding the direct and indirect interests of the company and its
executive officers, directors and employees in the merger by reading the
definitive proxy statement regarding the merger.
Cautionary Note Regarding Forward Looking Statements
Certain statements in this release that are not historical fact may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Numerous risks, uncertainties
and other factors may cause actual results to differ materially from
those expressed in any forward-looking statements. These factors
include, but are not limited to: (i) failure of customary closing
conditions, (ii) development and redevelopment risks, including risk of
construction delay, cost overruns, occupancy, governmental permits,
zoning, the increase of development costs in connection with projects
that are not pursued to completion, (iii) the occurrence of any event,
change or other circumstances that could give rise to the termination of
the merger agreement; (iv) the outcome of any legal proceedings that
have been or may be instituted by or against the company; (v) the
inability to complete the merger due to the failure to obtain
shareholder approval or the failure to satisfy other conditions to
completion of the merger; (vi) risks that the proposed transaction
disrupts current plans and operations and the potential difficulties in
employee retention as a result of the merger; (vii) the ability to
recognize the benefits of the merger; and (viii) the amount of the
costs, fees, expenses and charges related to the merger. Although
the company believes the expectations reflected in any forward-looking
statements are based on reasonable assumptions, it can give no assurance
that its expectations will be attained. For a further discussion
of these and other factors that could impact the company’s
future results, performance, achievements or transactions, see the
documents filed by the company from time to time with the SEC, and in
particular the section titled, "Item 1A. Risk Factors" in our Annual
Report on Form 10-K for the year ended December 31, 2006, which was
filed with the SEC on March 16, 2007, as amended by the company’s
Annual Report on Form 10-K/A, which was filed with the SEC on April 30,
2007. The Company undertakes no obligation to revise or update
any forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.