SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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14a-6(e)(2))
[ ] Definitive Proxy Statement
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[X] Soliciting Material Pursuant to 'SS'240.14a-12
INTERSTATE HOTELS CORPORATION
(Name of Registrant as Specified In Its Charter)
SHANER HOTEL GROUP LIMITED PARTNERSHIP
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Shaner Hotel Group Limited Partnership issued the following press release on
May 2, 2002.
SHANER HOTEL GROUP RESPONDS TO MERISTAR/INTERSTATE MERGER
Shaner's cash tender stands firm against penny-stock trade with MeriStar
PITTSBURGH -- May 2, 2002 -- Shaner Hotel Group, which on April 11
commenced a cash tender for Interstate Hotels Corporation (Nasdaq: IHCO) at $3
per share to obtain 51 percent of Interstate's Class A common stock, affirmed
today that Shaner will stand by its offer until the published May 31, 2002
deadline. Despite a planned merger announced today in which MeriStar Hotels and
Resorts, Inc. (NYSE: MMH) would combine with Interstate by trading 4.6 shares of
its stock for each Interstate share, Shaner is not withdrawing its offer.
Shaner Hotel Group, a major shareholder in Interstate holding more than
6 percent of IHCO common stock, is gratified that its persistent pursuit of
Interstate has forced IHCO's Board into action. The proposed MeriStar merger may
finally relieve investors from Interstate's excessive executive compensation,
poor performance and mounting financial losses--issues Shaner repeatedly has
raised in recent months. However, Shaner contends that investors will choose
cash over promises in the coming weeks - and favorably consider Shaner's
proposal.
Shaner takes issue with Interstate CEO Tom Hewitt's assertion during an
analyst conference call today that Interstate considered other deals before
merging with MeriStar. Shaner Hotel Group is Interstate's second-largest
shareholder and an established hotel management company. Even Shaner's repeated
proposals could not open negotiations. Hewitt confirmed today that other unnamed
suitors were also shut out. Shareholder value cannot be maximized until all
options are explored.
"The MeriStar deal trades one under-performing stock for another, only
in greater quantities," said Lance Shaner, chairman and CEO of Shaner Hotel
Group. "The benefit to Interstate shareholders is missing here." Shaner advises
Interstate shareholders to monitor the details of the proposed MeriStar
transaction closely, particularly in light of MeriStar's inability to complete
two previously announced mergers.
Shaner believes that investors will choose a cash profit and will
tender their shares, rather than assume a larger portfolio of MeriStar stock,
which has been threatened with de-listing from the New York Stock Exchange if it
continues to trade under $1. On news of the Interstate deal, MeriStar slid to
about 90 cents per share.
About Shaner Hotels
Shaner Hotel Group is a privately held, fully integrated hotel company,
which specializes in the acquisition, refurbishment, repositioning, development
and long-term ownership of full-service hotels. Shaner also has extensive
limited-service and extended-stay experience. Shaner Hotel Group owns 22 hotels,
representing 10 different hotel brands in 15 states. Formed in 1983, Shaner is
headquartered in State College, Pa.
About the Tender Offer
Shaner Hotel Group has filed a preliminary proxy statement dated April
24, 2002, with the Securities and Exchange Commission for the solicitation of
proxies for Interstate's 2002 annual meeting of stockholders and will file with
the Commission and will furnish to stockholders a definitive proxy statement for
that meeting. Stockholders should read the preliminary proxy statement, as well
as the definitive proxy statement when it becomes available, because they
contain important information. This press release is not a proxy statement, nor
is it a solicitation of any proxy. Any such solicitation will be made only by a
written definitive proxy statement filed with the Commission.
Shaner Hotel Group's tender offer is made pursuant to an offer to
purchase dated April 20, 2002, and the related letter of transmittal, both of
which have been filed with the Commission. This press release is not an offer to
purchase any Class A Common shares, nor a request for a tender of any of those
shares. Shaner's offer is made only by that offer to purchase and related letter
of transmittal.
Information concerning Shaner Hotel Group, certain of its executive
officers, the directors and certain executive officers of its general partner,
and Shaner Hotel Group's proposed nominees for election as directors, Lance T.
Shaner and Leo A. Keevican, Jr., each of whom may be deemed to be a participant
in a solicitation by Shaner Hotel Group of proxies for Interstate's 2002 annual
meeting of stockholders, including a description of their direct and indirect
interest, by security holdings or otherwise, in the matters to be acted upon at
that meeting, may be found in the preliminary proxy statement filed with the
Commission. Stockholders may obtain free copies of this press release, the
preliminary proxy statement, the definitive proxy statement when available, and
the offer to purchase and related letter of transmittal, at the Commission's
website at http://www.sec.gov. Stockholders may also obtain free copies of these
documents from (1) N.S. Taylor & Associates, Inc., 15 North Street, Second
Floor, Dover-Foxcroft, Maine 04426, toll-free telephone number 866.470.4500, or
(2) Shaner Hotel Group Limited Partnership, 1965 Waddle Road, State College,
Pennsylvania 16803, telephone number 814.234.4460.
Certain matters discussed in this press release may be forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Although Shaner Hotel Group believes the expectations reflected in any
such forward-looking statements are based on reasonable assumptions, it cannot
give assurance that its expectations will be obtained. Actual results may differ
materially from expectations.
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as....................................'SS'