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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: AUGUST 28, 1997
INTERSTATE HOTELS COMPANY
FOSTER PLAZA 10
680 ANDERSEN DRIVE
PITTSBURGH, PENNSYLVANIA 15220
(412) 937-0600
PENNSYLVANIA 1-11731 25-1788101
(State of incorporation) (SEC File No.) (IRS Employer
Identification No.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 28, 1997, Interstate Hotels Company (the "Company") acquired
substantially all of the equity interests in a limited partnership (the
"Partnership") that owns three full-service upscale hotels: the 359-room Albany
Marriott, the 320-room Minneapolis Marriott Southwest and the 350-room San Diego
Mission Valley Marriott. The total purchase price, including estimated capital
expenditures for anticipated renovations and closing costs, was approximately
$98.8 million. Prior to the acquisition by the Company, Milton Fine, Chairman of
the Board and the largest beneficial owner of the Company's Common Stock,
beneficially owned a 1.1% general partnership interest and a 17% limited
partnership interest in the entity that owned the three hotels. In addition, W.
Thomas Parrington, Jr., the Company's President and Chief Executive Officer, and
Robert L. Froman, the Company's Executive Vice President - Development, together
beneficially owned a 1.2% limited partnership interest in such entity. Giving
effect to the acquisition, Messrs. Fine, Parrington and Froman together
beneficially own a .62% limited partnership interest in the Partnership.
The Company used borrowings under its existing credit facility,
together with a $30.0 million non-recourse loan from Credit Lyonnais, New York
Branch secured by certain other property of the Company, to fund the
acquisition. The $30.0 million non-recourse loan matures in 2004 and bears
interest at a variable rate.
The Company has signed a letter of understanding with Host Marriott
Corporation ("HMC") to admit subsidiaries of HMC into the Partnership as
general and limited partners, for a capital contribution of approximately $48.3
million, the proceeds of which would be used to repay a portion of the
borrowings under the Company's existing credit facility. There can be no
assurance that such investment will be made.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description
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2.1(a) Plan and Agreement of Merger, dated as of August 28, 1997, by and
between IHP Holdings Partnership, L.P. and Interstate Hotels
Partners, L.P.
2.1(b) Form of Purchase and Sale Agreement and Assignment of Limited
Partnership Interest, dated as of August 28, 1997, by and between
IHP Investment Company, L.L.C. and eight (8) separate limited
partners.
2.1(c) Purchase and Sale Agreement and Assignment of Limited Partnership
Interest, dated as of August 28, 1997, by and between IHP
Investment Company, L.L.C. and SB/Interstate General Partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERSTATE HOTELS COMPANY
Date: September 12, 1997
By: /s/ MARVIN I. DROZ
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Marvin I. Droz
Senior Vice President and Secretary
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INDEX TO EXHIBITS
Exhibit No. Description
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2.1(a) Plan and Agreement of Merger, dated as of August 28, 1997, by and
between IHP Holdings Partnership, L.P. and Interstate Hotels
Partners, L.P.
2.1(b) Form of Purchase and Sale Agreement and Assignment of Limited
Partnership Interest, dated as of August 28, 1997, by and between
IHP Investment Company, L.L.C. and eight (8) separate limited
partners.
2.1(c) Purchase and Sale Agreement and Assignment of Limited Partnership
Interest, dated as of August 28, 1997, by and between IHP
Investment Company, L.L.C. and SB/Interstate General Partnership.