EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Contact:
Bruce Riggins Melissa Thompson Jerry Daly or Carol McCune
Director of Finance Director of Corporate Daly Gray Public Relations (Media)
(202) 295-2276 Communications (703) 435-6293
(202) 295-2228
MERISTAR ASSIGNS LEASES BACK TO WINSTON HOTELS, RETAINS MANAGEMENT CONTRACTS
WASHINGTON, D.C., July 1, 2002--MeriStar Hotels & Resorts (NYSE: MMH),
the nation's largest independent hotel management company, today announced that
it had assigned the leases for 47 hotels to a subsidiary of Winston Hotels
(NYSE: WXH), the hotels' owner, for $17 million. MeriStar will continue to
manage 39 of these hotels for Winston under five-year contracts, terminable on
the sale of an asset or for any reason after 12 months. Proceeds from the sale
will be used to pay down MeriStar's senior secured credit facility.
"All of our leases have now been converted to management contracts as
allowed by the REIT Modernization Act," said John Emery, MeriStar president and
chief operating officer. "As a result, we have significantly reduced the
potential volatility of our future earnings and have more closely aligned our
interests with those of Winston. This arrangement reflects a much better
business model for both companies and offers advantages to both. We have had a
long and successful relationship with Winston and look forward to opportunities
to expand it in the future."
"We have a great deal of confidence in MeriStar's ability to operate
our hotels in this new arrangement and look forward to exploring future
opportunities that benefit both companies," said Jim Rosenberg, Winston
president and chief operating officer.
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MeriStar Assigns Winston Leases
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Emery noted that Interstate Hotels Corporation (Nasdaq: IHCO), which is
expected to merge with MeriStar later this month or early next month pending
shareholder approval, operates all of its properties under management contracts
and has no leases. For more information regarding the effects of the transaction
with Winston on the combined company resulting from the proposed merger with
Interstate Hotels, please refer to pages 7 and 8 of the final joint proxy
statement and prospectus of MeriStar, filed with the SEC pursuant to Rule 424
under the Securities Act of 1933.
MeriStar Hotels & Resorts operates 267 hospitality properties with more
than 56,000 rooms in 42 states, the District of Columbia, and Canada, including
55 properties managed by Flagstone Hospitality Management, a subsidiary of
MeriStar Hotels & Resorts. BridgeStreet Corporate Housing Worldwide, a MeriStar
subsidiary, is one of the world's largest corporate housing providers, offering
upscale, fully furnished corporate housing throughout the United States, Canada,
the United Kingdom, France and 39 additional countries through its network
partners. For more information about MeriStar Hotels & Resorts, visit the
company's Web site: www.meristar.com.
THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS," WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, ABOUT MERISTAR,
INCLUDING THOSE STATEMENTS REGARDING FUTURE OPERATING RESULTS AND THE TIMING AND
COMPOSITION OF REVENUES, AMONG OTHERS, AND STATEMENTS CONTAINING WORDS SUCH AS
"EXPECTS," "BELIEVES" OR "WILL," WHICH INDICATE THAT THOSE STATEMENTS ARE
FORWARD-LOOKING. 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 CURRENT SLOWDOWN OF THE NATIONAL ECONOMY, ECONOMIC
CONDITIONS GENERALLY AND THE REAL ESTATE MARKET SPECIFICALLY, THE IMPACT OF THE
EVENTS OF SEPTEMBER 11, 2001, LEGISLATIVE AND REGULATORY CHANGES, AVAILABILITY
OF DEBT AND EQUITY CAPITAL, INTEREST RATES, COMPETITION, SUPPLY AND DEMAND FOR
LODGING FACILITIES IN OUR CURRENT AND PROPOSED MARKET AREAS AND THE POTENTIAL
DE-LISTING OF MERISTAR
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MeriStar Assigns Winston Leases
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HOTELS & RESORTS BY THE NYSE. ADDITIONAL RISKS ARE DISCUSSED IN THE MERISTAR'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING ITS REGISTRATION
STATEMENT ON FORM S-4 RELATING TO THE PROPOSED MERGER WITH INTERSTATE HOTELS
CORPORATION AND MERISTAR'S ANNUAL REPORT ON FORM 10-K.
THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES NOR SHALL THERE BE ANY SALE OF
ANY SECURITIES IN ANY STATE OR PROVINCE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER APPLICABLE
SECURITIES LAWS. MERISTAR HAS FILED A REGISTRATION STATEMENT ON FORM S-4 WITH
THE SEC IN CONNECTION WITH THE PROPOSED MERGER TRANSACTION WITH INTERSTATE. THE
FORM S-4 CONTAINS A PROSPECTUS, A PROXY STATEMENT, AND OTHER DOCUMENTS FOR THE
STOCKHOLDERS' MEETINGS OF MERISTAR AND INTERSTATE AT WHICH TIME THE PROPOSED
TRANSACTION WILL BE CONSIDERED. MERISTAR AND INTERSTATE PLAN TO MAIL THE PROXY
STATEMENT AND PROSPECTUS CONTAINED IN THE FORM S-4 TO THEIR RESPECTIVE
STOCKHOLDERS ON OR ABOUT JULY 1, 2002. THE FORM S-4, PROXY STATEMENT AND
PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT MERISTAR, INTERSTATE, THE
MERGER AND RELATED MATTERS. INVESTORS AND STOCKHOLDERS SHOULD READ THE FORM S-4,
PROXY STATEMENT AND PROSPECTUS AND THE OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE MERGER CAREFULLY BEFORE THEY MAKE ANY DECISION WITH RESPECT
TO THE MERGER. COPIES OF THE MERGER AGREEMENT AND OTHER ANCILLARY DOCUMENTS HAVE
BEEN FILED AS EXHIBITS TO THE FORM S-4. THE FORM S-4, PROXY STATEMENT AND
PROSPECTUS, AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE
MERGER TRANSACTION ARE AVAILABLE FREE OF CHARGE AT THE SEC'S WEB SITE, AT
WWW.SEC.GOV. IN ADDITION, THE PROXY STATEMENT AND PROSPECTUS, AND ALL OTHER
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER WILL BE MADE
AVAILABLE TO INVESTORS FREE OF CHARGE BY WRITING TO THE CONTACT ADDRESS SET
FORTH IN THIS PRESS RELEASE.
IN ADDITION TO THE FORM S-4, THE PROXY STATEMENT, AND THE OTHER
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER, MERISTAR IS
OBLIGATED TO FILE ANNUAL, QUARTERLY AND SPECIAL REPORTS, PROXY STATEMENTS AND
OTHER INFORMATION WITH THE SEC. YOU MAY READ AND COPY ANY REPORTS, STATEMENTS
AND OTHER INFORMATION FILED WITH THE SEC AT THE SEC'S PUBLIC REFERENCE ROOM AT
450 FIFTH STREET, N.W., WASHINGTON, D.C. 20549. PLEASE CALL THE SEC AT
1-800-SEC-0330 FOR FURTHER INFORMATION ON THE PUBLIC REFERENCE ROOM. FILINGS
WITH THE SEC ALSO ARE AVAILABLE TO THE PUBLIC FROM COMMERCIAL DOCUMENT-RETRIEVAL
SERVICES AND AT THE WEB SITE MAINTAINED BY THE SEC AT WWW.SEC.GOV.
PURSUANT TO INSTRUCTION 3 OF ITEM 4 OF SCHEDULE 14A, THE PARTICIPANTS
IN THE SOLICITATION INCLUDE MERISTAR, INTERSTATE, THEIR RESPECTIVE DIRECTORS,
AND MAY INCLUDE CERTAIN EXECUTIVE OFFICERS OF EACH. INFORMATION CONCERNING THESE
PARTICIPANTS AND THEIR DIRECT AND INDIRECT INTERESTS IN THE PROPOSED MERGER IS
CONTAINED THE FORM S-4.
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