EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Contact:
Kevin J. Welch Jerry Daly or Carol McCune
MeriStar Hospitality Daly Gray Public Relations (Media)
(301) 581-5926 (703) 435-6293
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P. COMMENCES CASH TENDER OFFERS
AND RELATED CONSENT SOLICITATIONS FOR OUTSTANDING DEBT SECURITIES
BETHESDA, Md., March 29, 2006-MeriStar Hospitality Corporation (NYSE:
MHX) announced today that its subsidiary MeriStar Hospitality Operating
Partnership, L.P. (the "Operating Partnership") had commenced cash tender
offers for any and all of the Operating Partnership's outstanding 9% Senior
Notes due 2008 (CUSIP No. 58984YAD5) and 9 1/8% Senior Notes due 2011 (CUSIP
No. 58984SAA4) (collectively, the "Notes"), as well as related consent
solicitations to amend such Notes and the indentures pursuant to which they
were issued. The tender offers and consent solicitations are being conducted
in connection with the previously announced agreement of MeriStar and the
Operating Partnership to merge with affiliates of The Blackstone Group.
The consent solicitations will expire at 5:00 p.m., New York City
time, on Wednesday, April 12, 2006, unless extended or earlier terminated by
the Operating Partnership (the "Consent Expiration Date"). Tendered Notes may
not be withdrawn and consents may not be revoked after the Consent Expiration
Date. The tender offers will expire at 8:00 a.m., New York City time, on
Tuesday, May 2, 2006, unless extended or earlier terminated by the Operating
Partnership (the "Offer Expiration Date").
Holders tendering their Notes will be required to consent to proposed
amendments to the Notes and to the indentures governing the Notes, that will
eliminate substantially all of the
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restrictive covenants contained in the indentures and the Notes (except for
certain covenants related to asset sales and change of control offers),
eliminate certain events of default and modify covenants regarding mergers,
including to permit mergers with entities other than corporations, and modify
provisions regarding defeasance and/or satisfaction and discharge to eliminate
certain conditions, and modify or eliminate certain other provisions contained
in the indentures and the Notes. Holders may not tender their Notes without
also delivering consents or deliver consents without also tendering their
Notes.
The total consideration for each $1,000 principal amount of Notes
validly tendered and not withdrawn pursuant to the tender offers is the price
(calculated as described in Schedule I to the Offer to Purchase referred to
below) equal to (i) the sum of (a) the present value, determined in accordance
with standard market practice, on the payment date for Notes purchased in the
tender offers of $1,000 payable on the applicable maturity date for the Notes
plus (b) the present value of the interest that accrues and is payable from
the last interest payment date prior to the payment date until the applicable
maturity date for the Notes, in each case determined on the basis of a yield
to such maturity date equal to the sum of (A) the yield to maturity (the
"Reference Yield") on the applicable U.S. Treasury Security specified below
(the "Reference Security"), as calculated by Bear, Stearns & Co. Inc. in
accordance with standard market practice, based on the bid-side price of such
Reference Security as of 2:00 p.m., New York City time, on the eleventh
business day immediately preceding the Offer Expiration Date, as displayed on
the applicable page of the Bloomberg Government Pricing Monitor specified in
the table below or any recognized quotation source selected by Bear, Stearns &
Co. Inc. in its sole
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discretion if the Bloomberg Government Pricing Monitor is not available or is
manifestly erroneous, plus (B) 50 basis points, minus (ii) accrued and unpaid
interest to, but not including, the payment date (in each case, the "Total
Consideration").
The Total Consideration includes a consent payment of $30.00 per
$1,000 principal amount of Notes payable in respect of Notes validly tendered
and not withdrawn and as to which consents to the proposed amendments are
delivered on or prior to the Consent Expiration Date (the "Consent Payment").
Holders of the Notes must validly tender and not withdraw Notes on or prior to
the Consent Expiration Date in order to be eligible to receive the Total
Consideration for such Notes purchased in the tender offers. Holders who
validly tender their Notes after the Consent Expiration Date and on or prior
to the Offer Expiration Date will be eligible to receive an amount, paid in
cash, equal to the Total Consideration less the Consent Payment. In each case,
Holders whose Notes are accepted for payment in the Offers shall receive
accrued and unpaid interest in respect of such purchased Notes from the last
interest payment date to, but not including, the payment date for Notes
purchased in the tender offers.
The following table summarizes certain terms of the tender offers.
AGGREGATE PRINCIPAL RELEVANT
CUSIP NO. AMOUNT OUTSTANDING SECURITY DESCRIPTION REFERENCE SECURITY BLOOMBERG PAGE
--------- ------------------ -------------------- ------------------ --------------
58984YAD5 $245,058,000 9% Senior Notes due 2008 4.375% US Treasury Note BBT4
due 12/31/07
58984SAA4 $342,665,000 9 1/8% Senior Notes due 2011 4.25% US Treasury Note BBT6
due 1/15/11
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The tender offers and consent solicitations are made upon the terms
and conditions set forth in the Offer to Purchase and Consent Solicitation
Statement, dated March 29, 2006 (the "Offer to Purchase"), and the related
Consent and Letter of Transmittal. The tender offers are subject to the
satisfaction of certain conditions, including receipt of consents sufficient
to approve the proposed amendments and the mergers having occurred, or shall
be occurring, substantially concurrent with the Offer Expiration Date. Further
details about the terms and conditions of the tender offers and the consent
solicitations are set forth in the Offer to Purchase.
The Operating Partnership has retained Bear, Stearns & Co. Inc. and
Lehman Brothers Inc. to act as the Dealer Managers for the tender offers and
Solicitation Agents for the consent solicitations and they can be contacted at
(877) 696-BEAR (toll-free) and (800) 438-3242 (toll-free), respectively. The
documents relating to the tender offers and consent solicitations are expected
to be distributed to holders beginning today. Requests for documentation may
be directed to D.F. King & Co., Inc., the Information Agent, which can be
contacted at (212) 269-5550 (for banks and brokers only) or (888) 644-5854
(for all others toll-free).
THIS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NEITHER AN
OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO SELL THE NOTES. THE OFFER
TO BUY THE NOTES IS ONLY BEING MADE PURSUANT TO THE TENDER OFFER AND CONSENT
SOLICITATION DOCUMENTS, INCLUDING THE OFFER TO PURCHASE THAT THE OPERATING
PARTNERSHIP IS DISTRIBUTING TO HOLDERS OF NOTES. THE TENDER OFFERS AND CONSENT
SOLICITATIONS ARE NOT BEING MADE TO HOLDERS OF NOTES IN ANY JURISDICTION IN
WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES, BLUE SKY OR OTHER LAWS OF SUCH JURISDICTION. IN ANY JURISDICTION
IN WHICH THE TENDER OFFERS OR CONSENT SOLICITATIONS ARE REQUIRED TO BE MADE BY
A LICENSED BROKER OR DEALER, THEY SHALL BE DEEMED TO BE MADE BY BEAR, STEARNS
& CO. INC. OR LEHMAN BROTHERS INC. ON BEHALF OF THE OPERATING PARTNERSHIP.
SAFE HARBOR STATEMENT
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. FORWARD-LOOKING STATEMENTS, WHICH ARE BASED
ON VARIOUS ASSUMPTIONS AND DESCRIBE OUR FUTURE PLANS, STRATEGIES AND
EXPECTATIONS, ARE GENERALLY IDENTIFIED BY OUR USE OF WORDS SUCH AS "INTEND,"
"PLAN," "MAY," "SHOULD," "WILL," "PROJECT," "ESTIMATE," "ANTICIPATE,"
"BELIEVE," "EXPECT," "CONTINUE," "POTENTIAL," "OPPORTUNITY," AND SIMILAR
EXPRESSIONS, WHETHER IN THE NEGATIVE OR AFFIRMATIVE. WE CANNOT GUARANTEE THAT
WE ACTUALLY WILL ACHIEVE THESE PLANS, INTENTIONS OR EXPECTATIONS. ALL
STATEMENTS REGARDING OUR EXPECTED FINANCIAL POSITION, BUSINESS AND FINANCING
PLANS ARE FORWARD- LOOKING STATEMENTS. EXCEPT FOR HISTORICAL INFORMATION,
MATTERS DISCUSSED IN THIS PRESS RELEASE ARE SUBJECT TO KNOWN AND UNKNOWN
RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE OUR ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS,
PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING
STATEMENTS.
FACTORS WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR OPERATIONS
AND FUTURE PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO: ECONOMIC CONDITIONS
GENERALLY AND THE REAL ESTATE MARKET SPECIFICALLY; SUPPLY AND DEMAND FOR HOTEL
ROOMS IN OUR CURRENT AND PROPOSED MARKET AREAS; OTHER FACTORS THAT MAY
INFLUENCE THE TRAVEL INDUSTRY, INCLUDING HEALTH, SAFETY AND ECONOMIC FACTORS;
COMPETITION; THE LEVEL OF PROCEEDS FROM ASSET SALES; CASH FLOW GENERALLY,
INCLUDING THE AVAILABILITY OF CAPITAL GENERALLY, CASH AVAILABLE FOR CAPITAL
EXPENDITURES, AND OUR ABILITY TO REFINANCE DEBT; THE EFFECTS OF THREATS OF
TERRORISM AND INCREASED SECURITY PRECAUTIONS ON TRAVEL PATTERNS AND DEMAND FOR
HOTELS; THE THREATENED OR ACTUAL OUTBREAK OF HOSTILITIES AND INTERNATIONAL
POLITICAL INSTABILITY; GOVERNMENTAL ACTIONS, INCLUDING NEW LAWS AND
REGULATIONS AND PARTICULARLY CHANGES TO LAWS GOVERNING THE TAXATION OF REAL
ESTATE INVESTMENT TRUSTS; WEATHER CONDITIONS GENERALLY AND NATURAL DISASTERS;
RISING INSURANCE PREMIUMS; RISING INTEREST RATES; AND CHANGES IN U.S.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, POLICIES AND GUIDELINES APPLICABLE
TO REAL ESTATE INVESTMENT TRUSTS. THESE RISKS AND UNCERTAINTIES SHOULD BE
CONSIDERED IN EVALUATING ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS
PRESS RELEASE OR INCORPORATED BY REFERENCE HEREIN. ALL FORWARD-LOOKING
STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PRESS RELEASE OR, IN THE CASE OF
ANY DOCUMENT INCORPORATED BY REFERENCE, THE DATE OF THAT DOCUMENT. ALL
SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR
ANY PERSON ACTING ON OUR BEHALF ARE QUALIFIED BY THE CAUTIONARY STATEMENTS IN
THIS SECTION. WE UNDERTAKE NO OBLIGATION TO UPDATE OR PUBLICLY RELEASE ANY
REVISIONS TO FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS, CIRCUMSTANCES OR
CHANGES IN EXPECTATIONS AFTER THE DATE OF THIS PRESS RELEASE.
This communication is being made in respect of the proposed merger
transaction involving MeriStar and affiliates of The Blackstone Group. In
connection with the proposed transaction, MeriStar has filed a definitive
proxy statement with the Securities and Exchange Commission. Before making any
voting or investment decision, shareholders are urged to read the definitive
proxy statement carefully and in its entirety as it contains important
information about the proposed transaction. The definitive proxy statement has
beed mailed to MeriStar shareholders. In addition, the definitive proxy
statement and other documents are available free of charge at the Securities
and Exchange Commission's Internet website, WWW.SEC.GOV. The definitive proxy
statement and other pertinent documents also may be obtained for free at
MeriStar's website, WWW.MERISTAR.COM, or by contacting Kevin Welch, Senior
Vice President and Treasurer, MeriStar Hospitality, telephone (301) 581-5926.
MeriStar and its directors and officers and other members of
management and employees may be deemed to be participants in the solicitation
of proxies in respect to the proposed transactions. Information regarding
MeriStar's directors and executive officers is detailed in its proxy
statements and annual reports on Form 10-K, previously filed with the SEC, and
the definitive proxy statement relating to the proposed transactions.
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