MCLEAN, VA � April 24, 2007 � Highland Hospitality Corporation
(�Highland�) (NYSE: HIH), today announced that it has entered into a definitive
agreement to be acquired by affiliates of JER Partners Acquisitions IV,
LLC (�JER�). The all-cash transaction is valued at approximately
$2.0 billion, including the assumption by JER of approximately $260 million
of Highland�s existing indebtedness.
Under the terms of the agreement, JER will acquire all of Highland�s
outstanding common stock and operating partnership (�OP�) units for $19.50
per share and per OP unit in cash. The purchase price represents
a premium of approximately 15% over Highland�s three-month average closing
share price. Also, pursuant to the terms of the agreement, no future
dividends will be paid on the common stock. In addition, JER has
agreed that, as promptly as practicable after the completion of the merger,
it will liquidate the surviving corporation in the merger. In the
liquidation, each holder of a share of Highland�s 7.875% Series A Cumulative
Redeemable Preferred Stock will receive $25.00 per share in cash plus any
then accrued but unpaid dividends.
Completion of the transaction, which is subject to shareholder and regulatory
approvals as well as other customary closing conditions, is currently expected
to occur in the third quarter of 2007. The transaction is not subject
to a financing condition. Highland�s board of directors has unanimously
approved the merger agreement and has recommended the approval of the transaction
by the company�s common shareholders at a special meeting that will be
held on a date to be announced.
James L. Francis, Highland�s President and Chief Executive Officer,
stated, �The proposed merger reflects our commitment to deliver value to
our shareholders. We have built a portfolio of high-quality hotels
and resorts and believe that the price offered by JER fairly reflects the
underlying value of these assets. JER is a well-respected firm with
a strong track record in our industry. We look forward to working
together to gain shareholder approval and consummate this merger.�
�Highland has assembled a premium portfolio of upscale properties,�
added Cia Buckley, President of JER�s U.S. Fund Business. �JER intends
to undertake a focused capital investment program to position the portfolio
for further growth. We view this as a key strategic investment for
our organization.�
Hotel Portfolio
Arizona
Pointe Hilton Tapatio Cliffs Resort
11111 North 7th Street
Phoenix, Arizona 85020
(602) 866-7500
California
Wyndham Palm Springs Hotel
888 East Tahquitz Canyon Way
Palm Springs, California 92262
(760) 322-6000
Colorado
Denver Courtyard Marriott
6901 Tower Road
Denver, Colorado 80249
(303) 371-0300
District of Columbia
The Churchill Hotel
1914 Connecticut Avenue, N.W.
Washington, DC 20009
(202) 797-2000
The Melrose Hotel
2430 Pennsylvania Avenue N.W.
Washington, DC 20037
(202) 955-6400
Florida
Hilton Tampa Westshore
2225 North Lois Avenue
Tampa, Florida 33607-2355
(813) 877-6688
Tampa Residence Inn Downtown
101 East Tyler St.
Tampa, Florida 33602
(813) 221-4224
Georgia
Crowne Plaza Ravinia Hotel
Atlanta-Ravinia (Perimeter Center)
4355 Ashford Dunwood road
Atlanta, Georgia 30346
(770) 395-7700
Courtyard Savannah Historic District
415 West Liberty St.
Savannah, Georgia 31401
(912) 790-8287
Hyatt Regency Savannah
Two West Bay St
Savannah, Georgia 31401
(912) 238-1234
Ritz-Carlton Atlanta Downtown
181 Peachtree Street, NE
Atlanta, Georgia 30303
(404) 659-0400
Illinois
The Silversmith Hotel Downtown Chicago
10 South Wabash Avenue
Chicago, IL 60603
(312) 372-7696
Maryland
Courtyard Gaithersburg Washingtonian Center
204 Boardwalk Place
Gaithersburg, Maryland 20878
(301) 527-9000
Hilton Garden Inn - BWI Airport
1516 Aero Drive
Linthicum, Maryland 21090
(410) 691-0500
Sheraton Annapolis
173 Jennifer Road
Annapolis, Maryland 21401
(410) 266-3131 |
Massachusetts
Hilton Boston Back Bay
40 Dalton Street
Boston, Massachusetts 02115
(617) 236-1100
Tremont Boston - Marriott Courtyard
275 Tremont Street
Boston, Massachusetts 02116
(617) 426-1400
Nebraska
Omaha Marriott
10220 Regency Circle
Omaha, Nebraska 68114
(402) 399-9000
New Jersey
Hilton Parsippany
One Hilton Court
Parsippany, New Jersey 07054
(973) 267-7373
Westin Princeton at forestall Village
201 Village Boulevard
Princeton, New Jersey 08054
(609) 452-7900
New York
Wind Watch Hyatt Regency Hotel
1717 Motor Parkway
Hauppauge, New York 11788
(631) 784-1234
Tennessee
Nashville Renaissance Hotel
611 Commerce Street
Nashville, Tennessee 37203
(615) 255-8400
Texas
Dallas Fort Worth Airport Marriott
8440 Freeport Parkway
Irving, Texas 75063
(972) 929-8800
San Antonio Plaza Marriott
555 S. Alamo Street
San Antonio, Texas 78205
(210) 229-1000
Sugar Land Marriott Town Square
16090 City Walk
Sugar Land, Texas 77479-6539
(281) 275-8400
Virginia
Hilton Garden Inn - Virginia Beach Town Center
252 Town Center Drive
Virginia Beach, Virginia 23462
(757) 326-6200
Renaissance Portsmouth Hotel and Conference Center
425 Water Street
Portsmouth, Virginia 23704
(757) 673-3000 |
Bear, Stearns & Co. Inc. and Merrill Lynch & Co. acted as financial
advisors to Highland, and Hogan & Hartson L.L.P. acted as its legal
advisor. Wachovia Securities and Citi acted as financial advisors to JER,
acquisition financing is being provided by Wachovia Bank and O�Melveny
& Myers LLP and Allen & Overy LLP acted as JER�s counsel.
Additionally, Highland announced today that it will release its earnings
for the quarter ended March 31, 2007 after the market closes on Wednesday,
May 2, 2007.
About Highland:
Highland Hospitality Corporation is a self-advised lodging real estate
investment trust, or REIT, focused on hotel investments in the United States.
The Company owns 27 hotel properties with an aggregate of 8,379 rooms in
14 states and the District of Columbia. Additional information can
be found on the Company�s website at www.highlandhospitality.com.
About JER Partners:
JER and its affiliates (�JER Partners�) is the private equity investment
arm of the J.E. Robert Company, Inc., a real estate investment management
company with more than 25 years of experience in sourcing, underwriting
and managing a broad spectrum of real estate equity investments and debt
products in North America and Europe. JER Partners currently manages
eight discretionary equity capital funds aggregating over $3.0 billion
of committed equity. These funds focus on office, hospitality, retail,
multi-family, healthcare-related real estate and industrial properties,
commercial mortgage-backed securities and mezzanine financing. For
more information on JER, please visit www.jer.com. Over the past 24 months,
JER Partners has had an ownership position in more than 17,000 hotel rooms.
Currently, JER Partners� hotel portfolio consists of more than 170 properties.
These properties include those operated under the Starwood, Marriott, Hilton
and Hyatt flags along with those operated by Longhouse Hospitality.
Forward Looking Statements
A number of the matters discussed in this document that
are not historical or current facts deal with potential future circumstances
and developments, in particular, information regarding the expected timetable
for completing the transaction, successful integration of the business,
benefits of the transaction and any other statements contained in this
news release that are not purely historical fact are forward-looking statements.
The discussion of such matters is qualified by the inherent risks and uncertainties
surrounding future expectations generally, and also may materially differ
from actual future experience involving any one or more of such matters.
Such forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those projected. Such risks
and uncertainties include, but are not limited to, the approval of the
proposed merger by regulatory agencies, approval of the merger by the shareholders
of Highland, satisfaction of various other conditions to the closing of
the merger contemplated by the merger agreement and the risks that have
been described from time to time in Highland�s reports filed with the Securities
and Exchange Commission (�SEC�), including its annual report on Form 10-K
for the fiscal year ended December 31, 2006. This document speaks only
as of its date, and each of Highland and JER disclaims any duty to update
the information herein.
Additional Information and Where to Find It:
In connection with the proposed merger and required shareholder
approval, Highland will file a proxy statement with the Securities and
Exchange Commission (�SEC�). Investors and security holders are urged to
read the proxy statement when it becomes available because it will contain
important information about the proposed merger. Investors and security
holders may obtain a free copy of the proxy statement (when available)
and other documents filed by Highland at the SEC website at http://www.sec.gov.
We also make available free of charge through our Internet site our filings
with the Securities and Exchange Commission as soon as reasonably practicable
after we electronically file such materials with, or furnish them to, the
Securities and Exchange Commission.
Participants in the Solicitation
Highland and its directors, executive officers and other
members of its management and employees may be deemed participants in the
solicitation of proxies from its stockholders in connection with the proposed
merger. Information concerning the interests of Highland�s participants
in the solicitation is set forth in Highland�s proxy statements and Annual
Reports on Form 10-K, previously filed with the SEC, and will be set forth
in the proxy statement relating to the merger when it becomes available. |