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New Proposal Would Attempt to Boost Shareholder Value and Resets Course for Profitability |
| PITTSBURGH - Feb. 18, 2002 - Interstate Hotels Corporation (Nasdaq:IHCO),
which on February 13 announced a fourth-quarter loss of $3.1 million and
a loss of $8 million for 2001, has received a new acquisition proposal
from State
College-based Shaner Hotel Group. Shaner tried to take over Interstate in October 2000, but was rebuffed when Interstate officials instead endorsed a $30 million cash infusion from affiliates of Lehman Brothers Holdings Inc. Shaner is again proposing a stock acquisition and subsequent joint venture. The Interstate Board of Directors received a formal agreement letter from Shaner this morning outlining the new deal. A month ago, Shaner first delivered a preliminary proposal and has been making inquiries ever since. On February 14, Interstate Chairman Thomas F. Hewitt sent Shaner a letter formally rejecting Shaner's offer. He cited an unwilling investor group that holds series B preferred shares, and generally that the proposal was not in "the best interests of IHC's public shareholders." It is not known if public shareholders have ever heard of Shaner's plan. Shaner simply asked to discuss the plan with the Board and then submit it to shareholders so that they could make their own decisions. Priority One: Shareholder Value "Mr. Hewitt's response was unfortunate," said Lance Shaner, chairman and chief executive officer of Shaner Hotel Group. "Investors have watched their Interstate holdings steadily plummet in value for three consecutive years. Shaner Hotel Group cannot sit idly by with a solution and not aggressively promote it." Shaner himself is an entrepreneur whose success owning and operating
hotels brings an expertise that would greatly enhance shareholder confidence.
The collective Interstate and Shaner hotel management contracts that would
be combined under the joint venture would represent more than 150 properties
and about 32,000 rooms in nearly all 50 states and several international
"As a shareholder, I believe Interstate is under-performing," added
Shaner. "As a businessman who operates a successful, fully integrated hotel
company with substantial ownership of hotel assets and extensive management
company experience, I'm confident that Shaner Hotel Group can bring new
long-term management contract income and cost savings to Interstate that
will allow the company to return to profitability. Shaner Hotel Group understands
how to make money in the hotel business."
Formed in 1983, SHG is headquartered in State College, Pa. |
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Lance T. Shaner, Chairman and Chief Executive Officer Shaner Hotel Group |