For Immediate Release:
FelCor and MeriStar Terminate Merger
IRVING, Texas and WASHINGTON, D.C., September 21, 2001--FelCor Lodging
Trust (NYSE: FCH), the nation's second largest hotel real estate investment
trust (REIT), and MeriStar Hospitality Corporation (NYSE: MHX), the nation's
third largest hotel REIT, today announced that the companies have jointly agreed
to terminate their previously announced merger due to adverse changes in the
financial markets. Both companies have cancelled their respective shareholder
meetings to vote on the matter.
"The termination of this merger is the result of the recent tragic
events and their subsequent adverse impact on the financial markets," said
Thomas J. Corcoran, Jr., president and CEO of FelCor. "A lot of dedicated people
worked very hard on this transaction, but Paul Whetsell of MeriStar and I have
agreed to focus now on our respective businesses."
The aftermath of the terrorist attacks also will adversely impact
previously issued earnings guidance for each of the companies. Both companies
expect to provide updated guidance at their respective third quarter conference
calls. There is no "break-up fee" associated with the merger termination.
MeriStar said that the REIT's management team will continue to actively
asset manage its portfolio of 112 hotels, which will be operated and managed by
MeriStar Hotels & Resorts (NYSE: MMH), the nation's largest independent hotel
management company.
FelCor's hotel portfolio consists of 185 hotels with nearly
50,000 rooms and suites and is concentrated primarily in the upscale and
full-service segments. FelCor is the owner of the largest number of Embassy
Suites(R), Crowne Plaza(R), Holiday Inn(R), and independently owned
Doubletree(R)-branded hotels. Other leading hotel brands under which FelCor's
hotels are operated include Sheraton Suites(R), Sheraton(R) and Westin(R).
FelCor has a current market capitalization of approximately $2.8 billion.
Additional information can be found on the company's website at www.felcor.com.
Washington, D.C.-based MeriStar Hospitality Corporation owns 112
principally upscale, full-service hotels in major market and resort locations
with 28,617 rooms in 27 states, the District of Columbia and Canada. MeriStar
Hospitality owns hotels under such internationally known brands as Hilton(R),
Sheraton, Marriott(R), Westin, Radisson(R) and Doubletree. For more information
about MeriStar Hospitality Corporation, visit its Web site: 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 about FelCor Lodging Trust and MeriStar
Hospitality Corporation, including those statements regarding future operating
results and the timing and composition of revenues, among others. Except for
historical information, the matters discussed in this press release are
forward-looking statements that are subject to certain risks and uncertainties
that could cause the actual results to differ materially, including the
following: the ability of the company to cope with the economic disruption
resulting from the terrorist attacks that occurred on September 11, 2001; the
ability of the company to successfully implement its acquisition strategy and
operating strategy; the company's ability to manage rapid expansion; changes in
economic cycles; competition from other hospitality companies; and changes in
the laws and government regulations applicable to the company. For a more
detailed description of some of those risks and uncertainties, please read the
sections titled "Cautionary Factors That May Affect Future Results" in the
annual report on Form 10-K of FelCor Lodging Trust for the year ended December
31, 2000, and "Risk Factors" and "Special Note Regarding Forward-Looking
Statements" in the annual report on Form 10-K of MeriStar Hospitality
Corporation for the year ended December 31, 2000.
MeriStar Hospitality Contacts: FelCor Lodging Trust Contacts:
----------------------------- -----------------------------
Bruce Riggins Thomas J. Corcoran, Jr.
Director of Finance President and CEO
(202) 295-2276 tcorcoran@felcor.com
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(972) 444-4901
(214) 528-2587
Melissa Thompson Richard J. O'Brien
Director, Corporate Communications Executive Vice President and CFO
(202) 295-2228 robrien@felcor.com
(972) 444-4932
Jerry Daly, Carol McCune (Media) Monica L. Hildebrand
Daly Gray Public Relations Vice President, Communications
(703) 435-6293 mhildebrand@felcor.com
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(972) 444-4917
(972) 742-2555
Stephen A. Schafer
Director, Investor Relations
Sschafer@felcor.com
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(972) 444-4912