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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO-T/A
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
INTERSTATE HOTELS CORPORATION
(Name of Subject Company)
SHANER HOTEL GROUP LIMITED PARTNERSHIP
(Name of Filing Person - Offeror)
Class A Common Stock, $0.01 par value per share
(Title of Class of Securities)
46088R108
(CUSIP Number of Class of Securities)
Lance T. Shaner
1965 Waddle Road
State College, Pennsylvania 16803
(814) 234-4460
(Name, address and telephone number of person
authorized to receive notices and communications on
behalf of filing Person)
With a copy to:
Leo A. Keevican, Jr., Esq.
DKW Law Group, PC
USX Tower, 58th Floor
600 Grant Street
Pittsburgh, Pennsylvania 15219
(412) 355-2600
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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$7,395,996.00 $680.43
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*Estimated for purposes of calculating the amount of the filing fee only. The
amount is based upon the purchase of a total of 2,465,322 shares of Class A
Common Stock, $0.01 par value per share, at a price per Share of $3.00 in cash.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[x] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
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AMENDMENT NO. 2 TO SCHEDULE TO-T
This Amendment No. 2 amends and supplements the Tender Offer Statement
on Schedule TO-T filed by Shaner Hotel Group Limited Partnership, a Delaware
limited partnership ("Shaner Hotel Group"), on April 3, 2002, and amended on
April 11, 2002 (as amended "Schedule TO-T"), relating to the offer by Shaner
Hotel Group to purchase 2,465,322 shares of Class A Common Stock, $0.01 par
value per share (the "Shares"), and, if applicable, the related preferred stock
purchase rights, of Interstate Hotels Corporation, a Maryland corporation (the
"Company"), at a price of $3.00 per Share, net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated April 11, 2002 ("Offer to Purchase"), and in the related Letter
of Transmittal, filed as Exhibits (a)(10) and (a)(2), respectively (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). The amendments to Schedule TO-T set forth below are reflected in the
Offer to Purchase dated April 20, 2002, attached to this Amendment as
Exhibit (a)(11).
ITEM 2. SUBJECT COMPANY INFORMATION.
Item 2 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows:
The section of the Offer to Purchase entitled "The Tender Offer -
Section 6. Price Range of Shares; Dividends" is hereby amended and
supplemented by updating the closing prices on Nasdaq through April 19,
2002.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
Item 3 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows:
The section of the Offer to Purchase entitled "The Tender Offer -
Section 9. Certain Information Concerning the Purchaser" is hereby
amended and supplemented by including biographical information on the
four principal executive officers of the Purchaser.
ITEM 4. TERMS OF THE TRANSACTION.
Item 4 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows:
The cover page of the Offer to Purchase is hereby amended and
supplemented by removing March 18, 2002 as a "record date" for shares
entitled to be tendered into the Offer.
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The Section of the Offer to Purchase entitled "The Tender Offer -
Section 1. Terms of this Offer; Expiration Date" is hereby amended and
supplemented by changing the expiration date of the offer from May 10,
2002, to May 31, 2002. This same change extending the expiration date
has been made throughout the Offer to Purchase wherever there is a
reference to the expiration date.
The section of the Offer to Purchase entitled "The Tender Offer -
Section 1. Terms of the Offer; Expiration Date" is hereby amended and
supplemented by adding the following:
In the event that the Purchaser decides to waive any or all of
the conditions to this Offer, it is required to and will
publicly announce the waiver to shareholders and, if a
condition is material, it will do so at least five business
days prior to the Expiration Date.
The section of the Offer to Purchase entitled "The Tender Offer -
Section 3. Withdrawal Rights" is hereby amended and supplemented to
make it clear that (i) tendered shares may be withdrawn at any time
prior to the expiration date of the offer, or any extension of that
date, and (ii) that if the Purchaser has not accepted tendered shares
by the expiration date, and paid for them promptly, they may be
withdrawn.
The section of the Offer to Purchase entitled "The Tender Offer -
Section 4. Acceptance for Payment and Payment; Proration" is hereby
amended and supplemented to clarify that, upon the expiration of the
offer, share certificates for shares not purchased in the offer will be
promptly returned.
The section of the Offer to Purchase entitled "The Tender Offer -
Section 14. Certain Conditions to this Offer" is hereby amended and
supplemented in the following three respects. First, to include an
objective standard of reasonableness with respect to a determination by
the Purchaser that a condition to the completion of the offer has
occurred. Second, in connection with the inclusion of the objective
standard of reasonableness, the language in this section which allows
the Purchaser to assert a condition regardless of the circumstances,
including any action or inaction by the Purchaser, has been deleted.
Third, to clarify that all conditions must either be satisfied or
waived prior to the expiration date of the offer.
The section of the Offer to Purchase entitled "The Tender Offer -
Section 14. Certain Conditions to this Offer" is hereby amended and
supplemented by adding the following in the middle of the third full
paragraph in that Section:
In order to show good faith, within two business days of
receiving reasonable assurance from the board of directors
that it has redeemed the preferred stock purchase rights, or
has taken other action to remove the impediments to the
completion of this Offer represented by the Rights Agreement,
we will place in
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escrow with the Depositary the full purchase price of the
shares sought in this Offer.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Item 5 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows:
The section of the Offer to Purchase entitled "The Tender
Offer - Section 11. Background of this Offer; Past Contacts,
Transactions or Negotiations with the Company" is hereby amended and
supplemented by adding the following at the end of that section:
On April 10, 2002, Shaner Hotel Group sent a letter
to Mr. Joseph J. Flannery, a director of the Company and a
Vice President of Lehman Brothers in New York City,
emphasizing that Lehman Brothers must not serve as a financial
advisor to the special committee of the Company's board of
directors formed to evaluate Shaner Hotel Group's Offer.
On April 11, 2002, Shaner Hotel Group filed with the
Securities and Exchange Commission its Schedule TO-T/A
relating to this Offer and incorporating an updated Offer to
Purchase, and published a summary advertisement in The New
York Times announcing the Offer, its terms, and how to obtain
more information about and copies of the Offer.
On April 11, 2002, Shaner Hotel Group sent to Timothy
Q. Hudak, Senior Vice President, General Counsel and Secretary
of the Company, a written request that the Company notify
Shaner Hotel Group of its election either to mail this Offer
and related materials to shareholders of record or to provide
Shaner Hotel Group with a shareholder mailing list.
On April 11, 2002, the Company issued a press release
stating that its board of directors would respond by April 24,
2002 to this Offer. The release stated that by that date the
board would recommend to shareholders acceptance or rejection
of the Offer, express no opinion or remain neutral on the
Offer, or state that it is unable to take a position with
respect to the Offer.
On April 12, 2002, Timothy Q. Hudak, Senior Vice
President, General Counsel and Secretary of the Company, in
response to the Company's April 11, 2002 letter to him,
indicated in a letter to counsel for Shaner Hotel Group that
the Company had elected to mail Shaner Hotel Group's tender
offer materials to shareholders.
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On April 12, 2002, in a letter to Mr. Hewitt, Mr.
Shaner requested that he be able to meet with and make a
presentation to the members of the special board committee of
independent directors formed to evaluate the Offer. Mr. Shaner
indicated in the letter that he would be willing to meet with
the members of the committee whenever and wherever would be
convenient for them.
On April 16, 2002, the Company issued a press release
stating that its special committee of independent directors
authorized to review and evaluate the terms and conditions of
this Offer, had engaged Merrill Lynch to act as its financial
advisor with the review and evaluation of this Offer. The
press release also announced that the board of directors had
taken action to defer the Distribution Date under the
Company's Rights Agreement until further action by the board.
ITEM 6. PURPOSES OF THE TRANSACTIONS AND PLANS OR PROPOSALS.
Item 6 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows:
The section of the Offer to Purchase entitled "The Tender Offer -
Section 12. Purposes of the Offer; Plans for the Company" is hereby
amended and supplemented by deleting the following language from the
second full paragraph in that section:
[T]o nominate and vote for two candidates for election to the
Company's board of directors at this year's annual meeting of
shareholders . . . .
and
The Purchaser intends to nominate and to vote for one director
candidate at the annual shareholder meeting in 2003 and two
director candidates in 2004.
Section 12 of the Offer to Purchase is hereby also amended and
supplemented by deleting the following last bullet point under the
second full paragraph in that section:
We will encourage the Company to investigate the following
concerns and issues and take any appropriate action based upon
the results of that investigation. We are concerned that, and
believe that, in recent years, the Company may have made a
questionable investment in the Renaissance Worldgate Hotel in
Kissimmee, Florida, may have misstated current assets in its
recent financial statements, and may have paid executive
compensation out of line with the Company's financial
performance.
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Section 12 of the Offer to Purchase is hereby also amended and
supplemented by changing the second last bullet point under the second
full paragraph in that section to read in full as follows:
Encourage the Company to enter into a business relationship
with us, which would involve the combination of both parties'
management and revenue from long-term management agreements,
and the achievement of operating synergies and efficiencies by
combining the overhead structures of both entities and
eliminating duplication of effort. Any business relationship
between Shaner Hotel Group and Interstate Hotels would be an
arms-length transaction, negotiated carefully by each of these
separate entities which will each have able and independent
counsel, and approved by disinterested members of the board of
directors of Interstate Hotels. In proposing a combination of
both entities' managements, we would suggest that Lance T.
Shaner serve as chief executive officer of both companies and
that J.B. Griffin serve as chief financial officer of both. In
that case, the reasonable employment agreements of the present
chief executive officer and chief financial officer of
Interstate Hotels would be honored. The backgrounds,
experience, and qualifications of Mr. Shaner and Mr. Griffin
are set forth on page 24 and in Schedule I to this offer. The
proposed combination of the long-term management agreements of
both companies would be based upon an independent appraisal of
those agreements by an appraiser mutually acceptable to both
companies.
ITEM 1. SUMMARY TERM SHEET.
Item 1 of the Schedule TO-T, which incorporates by reference the
information contained in the Offer to Purchase, is hereby amended and
supplemented as follows.
The section of the Offer to Purchase entitled "Summary Term Sheet" is
hereby amended and supplemented by modifying the questions and answers
in that section to reflect the changes made in the other sections of
the Offer to Purchase.
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ITEM 12. EXHIBITS.
(a)(1) Offer to Purchase, dated April 3, 2002.*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9).*
(a)(3) Notice of Guaranteed Delivery.*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(6) Press release issued by Shaner Hotel Group, dated March 27, 2002.*
(a)(7) Letter to Shareholders, dated April 3, 2002.*
(a)(8) Press release issued by Shaner Hotel Group, dated April 3, 2002.*
(a)(9) Summary advertisement published in The New York Times on April 11,
2002.*
(a)(10) Offer to Purchase, dated April 11, 2002.*
(a)(11) Offer to Purchase, dated April 20, 2002.
(a)(12) Press Release issued by Shaner Hotel Group, dated April 23, 2002.
(b) None.
(d) None.
(g) None.
(h) None.
*Previously filed
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
SHANER HOTEL GROUP LIMITED PARTNERSHIP
By: SHANER OPERATING CORP.
Its General Partner
/s/ Lance T. Shaner
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Lance T. Shaner,
Chairman and Chief Executive Officer
April 22, 2002
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EXHIBIT INDEX
EXHIBIT NO.
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(a)(1) Offer to Purchase, dated April 3, 2002.*
(a)(2) Letter of Transmittal (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9).*
(a)(3) Notice of Guaranteed Delivery.*
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.*
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(6) Press release issued by Shaner Hotel Group, dated March 27, 2002.*
(a)(7) Letter to Shareholders, dated April 3, 2002.*
(a)(8) Press release issued by Shaner Hotel Group, dated April 3, 2002.*
(a)(9) Summary advertisement published in The New York Times on April 11,
2002.*
(a)(10) Offer to Purchase, dated April 11, 2002.*
(a)(11) Offer to Purchase, dated April 20, 2002.
(a)(12) Press Release issued by Shaner Hotel Group, dated April 23, 2002.
(b) None.
(d) None.
(g) None.
(h) None.
*Previously filed
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