IRVING, Texas, April 20, 1998 - FelCor Suite Hotels, Inc. (NYSE: FCH), the largest non-paired hotel real estate investment trust (REIT), today announced the signing of an agreement to purchase eight all-suite hotels from Starwood Hotels Resorts (NYSE: HOT) for an aggregate cash purchase price of approximately $245 million. The closing, subject to due diligence and the satisfaction of certain conditions, is expected to occur at the end of April.
Six of the eight hotels, following acquisition, are expected to be operated as Promus-branded hotels and be managed by an affiliate of Promus Hotel Corporation (NYSE: PRH), which manages 66 of FelCor's 76 current hotels. The transaction adds six new management contracts to Promus' portfolio. Upon completion of the purchase of the eight hotels, FelCor will increase its portfolio to 84 hotels, consisting of 58 Embassy Suites (acquired by FelCor over the last four years), 14 Doubletree Guest Suites(R), two Doubletree(R) full-service hotels, four Sheraton Suites(R), five Sheraton(R) hotels and one Hilton Suites(R) hotel.
As a part of the overall transaction with Starwood, two of the eight hotels will be managed by Sheraton as Sheraton Suites hotels. FelCor continues to focus primarily on acquiring Promus-branded hotels with Embassy Suites, Doubletree Guest Suites and Doubletree hotels. In addition, FelCor also expects to continue its Sheraton relationship with Starwood.
The eight hotels to be acquired have a total of 1,898 suites and attract
both business and leisure travelers. Located in geographically diverse
U.S. markets, the hotels are currently identified as:
|Embassy Suites - Phoenix (Airport-44th St.), AZ||229|
|Embassy Suites - Phoenix (Tempe/ASU), AZ||224|
|Embassy Suites Resort - Palm Desert, CA||198|
|Embassy Suites - Atlanta (Airport), GA||233|
|Embassy Suites - St. Louis (Downtown), MO||297|
|Doubletree Guest Suites - Dallas-Ft. Worth (Airport), TX||308|
|Doubletree Guest Suites - Ft. Lauderdale (Cypress Creek), FL||254|
|Doubletree Guest Suites - Lexington, KY||155|
"This acquisition further expands our very important alliance with Promus with approximately a 10% growth in hotels managed by Promus, our first strategic partner," said Thomas J. Corcoran, Jr., FelCor's President and CEO. "This transaction also strengthens our alliances with REITs that have an ownership position in their existing brands. In addition to the Promus brands, we anticipate other opportunities to grow with Starwood (owner of the Sheraton(R) and Westin(R) brands), which recently acquired Sheraton's parent, ITT Corporation. This purchase of eight hotels is a win-win transaction for FelCor, Promus and Starwood."
On March 24, 1998 FelCor Suite Hotels, Inc., announced the proposed acquisition, through merger, of the 109 hotels owned or leased by Bristol Hotel Company (NYSE: BH). The hotel operations business of Bristol will be spun off to Bristol Hotels Resorts, Inc., ("New Bristol"). FelCor focuses on upscale and full-service hotels and suites, and is the world's largest owner of Embassy Suites hotels.
Upon the closing of the merger, FelCor also will become the world's
largest owner of Holiday Inn(R) hotels. New Bristol is expected to be the
largest independent hotel operating company and to continue to be the largest
franchisee of Holiday Hospitality, operating 89 full service hotels under
the Crowne Plaza(R), Holiday Inn Select(R) and Holiday Inn brands. In addition,
New Bristol operates 20 hotels under various other brand names.
|Hervey A. Feldman, Chairman of the Board of the Company, has been engaged in the hotel business for approximately 30 years, including serving as the founding President and Chief Executive Officer of Embassy Suites, Inc. (the predecessor of Promus) from 1983 to 1990 and as its Chairman of the Board from 1990 until 1992.|
|Thomas J. Corcoran, Jr., President and Chief Executive Officer of the Company has been engaged in the hotel and restaurant business since 1979, with experience in the development, financing and acquisition of hotel and restaurant properties.|
FelCor was formed in July of 1994 by the founding president of Embassy Suites hotels, Hervey A. Feldman, and his partner and long-time hotel and restaurant executive Thomas J. Corcoran, Jr. With the purchase of the Starwood hotels, FelCor's portfolio will consist of 84 hotels with 20,427 suites and rooms operated under the Embassy Suites, Doubletree Guest Suites, Sheraton and Hilton brands. FelCor's total market capitalization is currently in excess of $2 billion.
With the exception of historical information, the matters discussed in this news release include "forward looking statements" within the meaning of the federal securities laws and are qualified by cautionary statements contained herein and in FelCor's filings with the Securities and Exchange Commission.