NASHVILLE, Tenn.--Jul. 19, 2012-- Gaylord Entertainment Company (NYSE:GET) today
issued a statement in response to the so-called “open letter” to the
stockholders of Gaylord
Entertainment Company from TRT Holdings, Inc.
(“TRT”). Gaylord continues to believe that the sale of rights to manage
its hotels to Marriott International, Inc. and the
Company’s subsequent conversion to a real estate investment trust
(REIT) are in the best interest of its stockholders. The Company would
also note that the proposed transaction was unanimously approved by the
Gaylord Board of Directors, including the two Gaylord Board members
designated by TRT – one of whom is the former Chief Financial Officer
of TRT and the other is the Chief Executive Officer of a large hotel
management company.
Gaylord Statement
As Gaylord has described previously, the Company engaged in an
extended process to consider alternatives to increase long-term value
for stockholders. Among the alternatives considered were the current
proposed transaction (which solicited interest in acquiring our
management contracts from four hotel operators including TRT) as well
as indications of interest to acquire the entire Company. TRT had the
opportunity to participate in each leg of that process and ultimately
failed to present a proposal with respect to either one, despite being
granted every conceivable due diligence information request and
extended periods of time to develop any proposal.
The proposed transaction which will result from the sale of
the management contracts and the conversion of the Company to a REIT is
the result of multiple rounds of bidding with the hotel operators who
expressed interest in acquiring rights to manage Gaylord’s hotels, and
intensive negotiations over all of the terms of the management
contracts. Early on in the process, Gaylord engaged Hogan Lovells
LLP as special counsel solely for the purpose of representing the
Company’s interests in negotiating the management contracts. Hogan
Lovells worked with the Company’s management team and financial advisor
to obtain the best possible results in the negotiations with each
bidder. The result of that process is a set of terms that the Company
believes are extraordinarily favorable to Gaylord. Commenting on the
proposed management agreements, Bruce Parmley, a
partner at Hogan Lovells, said, “My partner and I who represented
Gaylord have a collective 50 years of experience in structuring and
negotiating hotel management agreements with all of the well-known
national and international brands of four and five star hotels, almost
exclusively on behalf of owners and investors. It is fair to say that
the economic and legal terms for the proposed Gaylord/Marriott
management agreements, taken as a whole, represent an excellent set of
terms for a hotel owner and compare very favorably from the owner’s
perspective with other transactions in the industry, and we so advised
Gaylord’s Board in their consideration.”
Arne Sorenson, CEO of Marriott, said, “This
was an intensely competitive set of negotiations in which we agreed to
a set of legal and economic terms that we believe are fair to both
parties, deliver real value to both, and in Marriott’s view, represent
the lengths to which we were willing to go to obtain the rights to
manage an extraordinary, one-of-a-kind group of assets.”
The TRT “open letter” contains a number of significant
inaccuracies and omissions relating to the Marriott agreement, as well
as gross mischaracterizations of the proposed transaction and
alternatives, and Gaylord will respond to each item in detail at a
later date. However, the Company believes it is important to address a
few of the more egregious comments. For example:
- TRT incorrectly states that the Marriott agreement would
prohibit Gaylord from selling its hotels without Marriott’s consent, or
to any buyer that owns 10 or more full-service hotels. This is simply
false -- no such restrictions will apply. With very limited exceptions
(for a sale to felons, suspected terrorists or direct brand competitors
of Gaylord/Marriott) Gaylord is free to sell the
hotels to any buyers, without Marriott's consent.
- TRT also incorrectly states that Marriott may simply assign
the Gaylord management agreements to a third party without ensuring
that the Gaylord hotels continue to receive the benefits of the
Marriott trademarks and system. That is also false. Essentially,
Marriott cannot sell or transfer the management rights to the Gaylord
Hotels unless it sells the entire Marriott system to a third party.
- TRT also grossly underestimates the benefits of management
by Marriott, including access to Marriott’s world-class programs and
services, economies of scale not otherwise available to Gaylord, and
Marriott’s long track record of success in the large group meetings
segment.
Gaylord also reiterated that it has retained the contractual
right to consider alternative proposals to acquire the Company that are
presented prior to the stockholders’ meeting to consider the proposed
transaction. The Company and its Board of Directors remain open and
willing to consider an offer for the entire Company which produces the
best value for stockholders. In that regard, the Company noted that TRT
has failed to produce any offer to acquire the entire Company despite
being given the opportunity to do so, the information on which to base
its decision and significant extended periods of time to develop a
proposal.
Colin V. Reed, Chairman and Chief Executive
Officer of Gaylord
Entertainment, said, “We were surprised by TRT’s letter given
TRT’s involvement in every stage of the process, including
participating in the bidding process for the management contracts and
exploring an offer to acquire Gaylord
Entertainment. We believe TRT’s actions represent an attempt to
derail a process that is in the best interests of all of our
stockholders. We have filed proxy materials with the Securities
and Exchange Commission and will mail them to our stockholders
after the SEC’s review and comment process is complete. We look forward
to our stockholders having the opportunity to formally consider the
proposed transaction at our upcoming stockholder meeting. The Board of
Directors and the Company remain committed to producing the best value
for stockholders and believe that the proposed transaction does so. We
will continue to guard against the efforts of any third party to seize
control of our Company without paying a full and fair price to all
stockholders.”
About Gaylord Entertainment
Gaylord Entertainment
(NYSE: GET), a leading hospitality and entertainment company based in Nashville, Tennessee,
owns and operates Gaylord Hotels (www.gaylordhotels.com),
its network of upscale, meetings-focused resorts, and the Grand Ole
Opry (www.opry.com), the weekly
showcase of country music’s finest performers for more than 85
consecutive years. The Company’s entertainment brands and properties
include the Radisson Hotel Opryland, Ryman
Auditorium, General Jackson Showboat,
Gaylord Springs Golf Links, Wildhorse Saloon, and WSM-AM.
For more information about the Company, visit www.GaylordEntertainment.com.
This press release contains statements as to the Company’s
beliefs and expectations of the outcome of future events that are
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. You can identify these statements by the
fact that they do not relate strictly to historical or current
information. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from
the statements made. Such factors include those described in the
Company’s filings made from time to time with the Securities and
Exchange Commission, including those described in the Company’s
Annual Report on Form 10-K for the fiscal year ended December
31, 2011, and those associated with the Company’s plans to
qualify as a REIT for federal income tax purposes following the
consummation of the Company’s previously announced transaction with Marriott
International, Inc., including the failure to receive, on a
timely basis or otherwise, the required approvals by the Company’s
stockholders or the private letter ruling from the IRS; the
Company’s expectation to elect and qualify for REIT status and the
timing and effect of that election; the Company’s ability to remain
qualified as a REIT; the form, timing and amount of the special
earnings and profits distribution; the Company’s and Marriott’s ability
to consummate the sale; operating costs and business disruption may be
greater than expected; and the Company’s ability to realize cost
savings and revenue enhancements from the proposed REIT conversion. The
Company does not undertake any obligation to release publicly any
revisions to forward-looking statements made by it to reflect events or
circumstances occurring after the date hereof or the occurrence of
unanticipated events.
Additional Information and Where to
Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy securities or a solicitation of any
vote or approval. Granite Hotel Properties, Inc.
(“Granite”) has filed with the Securities and Exchange Commission
(“SEC”) a registration statement on Form S-4 containing a preliminary
proxy statement of the Company and a prospectus of Granite which
describes our plans to qualify as a REIT for federal income tax
purposes following the consummation of the Company’s transaction with Marriott
International, Inc., and the contemplated merger between Granite
and the Company to facilitate the REIT election. The registration
statement has not yet become effective. Notice of a special meeting and
a definitive proxy statement/prospectus will be mailed to stockholders
of the Company who hold shares of the common stock of the Company on
the record date to be determined by the Company’s board of directors.
INVESTORS ARE URGED TO READ THE FORM S-4 AND PROXY STATEMENT (INCLUDING
ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND REIT CONVERSION.
You may obtain copies of all documents filed with the SEC
concerning the proposed transaction, free of charge, at the SEC’s
website at www.sec.gov under the
registrant’s name of Granite Hotel Properties, Inc. In
addition, stockholders may obtain free copies of the documents by
sending a written request to the Company’s Secretary at Gaylord Entertainment Company,
One Gaylord Drive, Nashville, Tennessee
37214, or by calling the Secretary at (615) 316-6000.
Investors should read the Form S-4 and proxy statement
carefully before making any voting or investment decisions.
Interests of Participants
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of the Company in connection with the proposed merger and
REIT conversion. Information regarding the Company’s directors and
executive officers is set forth in the Company’s proxy statement for
its 2012 annual meeting of stockholders and its Annual Report on Form
10-K for the fiscal year ended December 31, 2011, which
were filed with the SEC on April 3, 2012
and February 24, 2012, respectively. Additional
information regarding persons who may be deemed to be participants in
the solicitation of proxies in respect of the proposed merger and REIT
conversion is contained in the proxy statement/prospectus filed by
Granite with the SEC.
|