Exhibit (a)(1)-3
KALMIA INVESTORS, LLC
601 CARLSON PARKWAY, SUITE 200
MINNETONKA, MN 55305
FOR INFORMATION:
(800) 547-0854
January 8, 2004
To Holders of Units of Limited Partnership Interests of Westin Hotels Limited
Partnership
Dear Fellow Unitholder:
Enclosed with this letter are the Offer to Purchase and Agreement of Sale
(together, our "Offer") by Kalmia Investors, LLC (the "Purchaser" or "Kalmia")
to purchase limited partnership interests (each a "Unit") of Westin Hotels
Limited Partnership, a Delaware limited partnership (the "Partnership"). The
Offer is for up to 50,000 Units, representing approximately 37% of the Units
outstanding on the date of the Offer.
o KALMIA IS OFFERING TO PAY $725 IN CASH FOR EACH UNIT (WHICH IS $25 PER UNIT
HIGHER THAN STARWOOD'S OFFER), less the amount of any distributions
declared or paid on or after December 31, 2003 (our "Purchase Price"). This
is a substantial premium over recently reported sales in the open market.
o KALMIA'S OFFER IS HIGHER THAN THE PRICE THAT THE GENERAL PARTNER'S
FINANCIAL ADVISOR FOUND TO BE FAIR TO UNITHOLDERS FROM A FINANCIAL POINT OF
VIEW.
o KALMIA WILL PAY THE $50 PER TRANSFER FEE CHARGED BY THE PARTNERSHIP. You
will not pay it.
Our Offer is better than Starwood's offer to purchase your Units for $700 per
Unit for the following reasons:
o OUR OFFER IS $25 PER UNIT HIGHER THAN STARWOOD'S OFFER. In its letter to
Unitholders dated January 6, Starwood states that it does not intend to
increase its offer price.
o OUR OFFER HAS NO MINIMUM CONDITION. By contrast, Starwood's offer includes
a non-waivable condition that at least a majority of the issued and
outstanding Units be tendered and not withdrawn. That means that Starwood
will not purchase your Units unless at least 67,801 Units are tendered to
it. We do not believe that Starwood will meet this condition.
o Starwood is soliciting your consents to change the Limited Partnership
Agreement as part of its tender offer. We are not soliciting any consents
as part of our Offer.
In view of the superiority of our Offer, we are asking that the General Partner
recommend that Unitholders withdraw any Units they may have tendered to Starwood
and tender them to Kalmia. In our view, failure by the General Partner to do so
would raise more questions about the General Partner's independence from
Starwood.
Act now:
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TO TENDER TO KALMIA, PLEASE READ THE PROCEDURES DESCRIBED IN OUR OFFER AND
COMPLETE AND RETURN THE ENCLOSED YELLOW AGREEMENT OF SALE TO US. IF YOU HAVE
ALREADY TENDERED UNITS TO STARWOOD AND WANT TO WITHDRAW THEM, YOU CAN USE THE
ENCLOSED BLUE NOTICE OF WITHDRAWAL.
o Kalmia, the largest Unitholder in the Partnership, owning 18,575 Units, or
13.7% of the total outstanding Units, is not consenting to Starwood's
proposals to change the Partnership's limited partnership agreement.
Likewise, we urge you not to give your consent. If you have already given
your consent, we urge you to revoke it. Withdrawing Units tendered to
Starwood will not automatically revoke your consent. You will need to
revoke your consent separately.
We have previously written to Unitholders to express our concerns as to the
obvious conflicts of interest between Starwood and the General Partner. Nothing
has lessened our concerns:
o All of the General Partner's directors and officers remain Starwood
employees.
o Even though the General Partner's financial advisor has stated that
Starwood's offer of $700 ($25 less than Kalmia's Offer) is fair from a
financial point of view to Unitholders, the fact remains that the
General Partner has announced no plan to maximize the value of the
Unitholders' investment.
o We are still considering whether to ask the other Unitholders to
replace the General Partner with an independent third party.
You should also take these factors into account in considering our Offer.
o If you are the record owner of Units and you tender your Units to us in the
Offer, you will not have to pay transfer fees, brokerage fees or similar
expenses. The Partnership typically charges a transfer of fee $50 per
Unitholder, and brokers charge sales commissions generally equal to the
greater of $200 or 7-8% of gross proceeds, which you will not have to pay
here. If you own your Units through a broker or other nominee, and your
broker tenders your Units on your behalf, your broker or nominee may charge
you a fee.
o There is no established public market for the Units, although there is a
limited secondary market. If you sell on the secondary market, you may
receive a higher or lower price than our Purchase Price or the historical
prices described above.
o The tender of your Units may be withdrawn at any time prior to the
expiration date of our Offer, including any extensions.
o By tendering, you will give up the opportunity to participate in any future
benefits of ownership, including potential future distributions by the
Partnership. Our Purchase Price may be less than the total amount that you
might otherwise receive with respect to your Units over the remaining term
of the Partnership.
o We will purchase in our Offer a maximum of 50,000 Units. If Unitholders
offer us more Units, we will prorate our purchase ratably to all sellers.
Starwood's offer is not subject to proration.
o If as few as 49,226 Units are tendered to us and we accept them for
payment, we will own a majority of the Units, which will give us the
ability to control many decisions of the Unitholders, including the removal
of the General Partner. Please see Section 7 of our Offer, "Purposes and
Effects of the Offer", for a description of those decisions. We have not
calculated a control premium in establishing our Purchase Price for your
Units. We have set a price that in our opinion will induce Unitholders to
tender while allowing us to profit from ownership of the Units. Therefore,
our interests may conflict with yours.
o We have requested information from the General Partner which we have not
yet received. In order to allow us to proceed with our Offer without having
received material non-public information, we have asked the General Partner
to provide the information, if the General Partner actually provides it,
not to us, but rather to our counsel to hold in confidence.
o We will not pay you interest on our Purchase Price.
o The General Partner is required to announce a recommendation regarding our
Offer within 10 business days after the mail date of our Offer or as soon
as possible upon becoming aware of the Offer. The recommendation will be
contained in a Schedule 14D-9 filed with the Securities and Exchange
Commission.
o Starwood could modify the terms of its tender offer to eliminate its
majority condition.
TO ACCEPT OUR OFFER:
1. Please complete the enclosed yellow Agreement of Sale (if not otherwise
indicated, please note the number of Units you wish to sell in the
signature area of the Agreement of Sale), and have it MEDALLION SIGNATURE
GUARANTEED (this can be done by your broker or a bank where you have an
account).
2. Return the completed yellow Agreement of Sale to us in the enclosed
pre-addressed envelope.
TO WITHDRAW UNITS FROM STARWOOD'S OFFER:
Please see Section 5 "Withdrawal Rights", of the Starwood Offer to Purchase for
instructions on how to withdraw your tender. For your convenience, a blue Notice
of Withdrawal is enclosed.
TO REVOKE CONSENTS FROM STARWOOD:
Withdrawing your tender from Starwood will not revoke your consents. In order to
revoke your consents, please see Section 4, "Voting and Revocation of Consents",
of Starwood's Consent Solicitation, contained in its Offer to Purchase.
OUR OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON FEBRUARY 9, 2004, subject
to any extension. We encourage you to act promptly. Our Offer will remain open
at least ten business days following any reduction in our purchase price
resulting from a distribution made by the Partnership. By accepting the Offer,
you will agree that we are entitled to all distributions made by the Partnership
on or after December 31, 2003. Unless the General Partner pays the distribution
directly to us or you remit the amount of the distribution to us, we will reduce
our purchase price by the amount of the distribution. If the Offer is extended
or a distribution occurs within the Offer period, we will make a public
announcement. We reserve the right to extend, amend or terminate our Offer.
BEFORE TENDERING, BE SURE TO READ "RISKS AND FACTORS TO CONSIDER BEFORE
TENDERING" IN THE OFFER TO PURCHASE. Please consider our Offer carefully. If you
have any questions, please telephone us at (800) 547-0854. Thank you for your
consideration.
Very truly yours,
Kalmia Investors, LLC
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KALMIA IS NOT AN AFFILIATE OF THE GENERAL PARTNER OR OF THE PARTNERSHIP. PLEASE
CAREFULLY REVIEW THE ENCLOSED OFFER. AN AGREEMENT OF SALE IS ENCLOSED; IN ORDER
TO TENDER YOUR UNITS YOU MUST PROPERLY COMPLETE AND DULY EXECUTE THE AGREEMENT
OF SALE IN ACCORDANCE WITH THE INSTRUCTIONS AND RETURN IT TO US.
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THIS LETTER IS NEITHER AN OFFER TO PURCHASE, NOR A SOLICITATION OF AN OFFER TO
SELL THE UNITS. THE OFFER IS MADE ONLY BY THE OFFER TO PURCHASE AND THE RELATED
AGREEMENT OF SALE AND IS NOT BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM)
HOLDERS OF UNITS IN ANY JURISDICTION WHICH THE OFFER OR THE ACCEPTANCE THEREOF
WILL NOT BE IN COMPLIANCE WITH THE SECURITIES LAWS OF SUCH JURISDICTION; IN
THOSE JURISDICTIONS WHERE SECURITIES LAWS REQUIRE THE OFFER TO BE MADE BY A
LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF THE
PURCHASER ONLY BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE
LAWS OF SUCH JURISDICTION.
Our Offer will expire at 5:00 p.m., Eastern Time on February 9, 2004, unless the
Purchaser, in its sole discretion, shall have extended the period of time for
which the Offer is open.
OUR OFFER CONTAINS IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.