Blackstone Affiliate Acquiring 9 MeriStar Hotels for $367 million

• 
  SAVE
• 
  SHARE
• 
  TEXT SIZE
• 
  PRINT
• 
  COMMENT
• 
  PDF

. October 14, 2008

BETHESDA, MD, February 1, 2006. MeriStar Hospitality Corporation (NYSE: MHX), one of the nation's largest hotel real estate investment trusts (REIT), today announced that it has signed a definitive agreement to sell a portfolio of nine hotels (1,948 rooms) and a golf and tennis club, all located in Florida, to an affiliate of The Blackstone Group for approximately $367 million in cash, subject to certain adjustments and satisfaction of customary closing conditions. The company expects the transaction to close by the end of the first quarter 2006. The company intends to use the majority of the proceeds to further reduce debt, particularly its most expensive 10.5 percent senior unsecured debt, which currently is callable by the company.

The properties to be sold include:

Best Western Sanibel Island Beach Resort (46 rooms)

The Dunes Golf & Tennis Club

Hilton Cocoa Beach Oceanfront (296 rooms)

Hilton Clearwater Beach Resort (426 rooms)

Sanibel Inn (96 rooms)

Seaside Inn (32 rooms)

Sheraton Beach Resort Key Largo (200 rooms)

Song of the Sea (30 rooms)

South Seas Island Resort (579 rooms)

Sundial Beach Resort (243 rooms)

"We expect this portfolio sale to generate significant benefits for our shareholders by allowing us to accelerate our business plan objectives of repaying our more expensive debt and completing property upgrades," said Paul Whetsell, chairman and CEO. "Furthermore, with the closing of this transaction, our asset disposition program will be nearly complete. As a result of this transaction we will have significantly greater financial flexibility and greater visibility on the timing of restoring a regular cash dividend to our common shareholders. We are pleased to be able to take advantage of the strong real estate market in Florida and unlock the substantial values in these assets for our shareholders." The sales price reflects an EBITDA multiple for the 10 properties that is accretive to the company's current trading value.

Bethesda, Md.-based MeriStar Hospitality Corporation owns 58 principally upper-upscale, full service hotels in major markets and resort locations with 17,003 rooms in 19 states and the District of Columbia. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and Radisson. For more information about MeriStar Hospitality, visit the company's website: www.meristar.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.