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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: December 30, 1997
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BOYKIN LODGING COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Ohio 001-11975 34-1824586
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification
Number)
Terminal Tower, Suite 1500, 50 Public Square,
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Cleveland, Ohio 44113
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(Address of Principal Executive Offices) (Zip Code)
(216) 241-6375
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
The Merger
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On December 30, 1997, Boykin Lodging Company, an Ohio
corporation ("Parent"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Red Lion Inns Limited Partnership, a Delaware limited
partnership (the "Partnership"), Red Lion Properties, Inc., a Delaware
corporation (the "General Partner"), Red Lion Inns Operating L.P., a Delaware
limited partnership (the "Subsidiary Partnership"), Boykin Hotel Properties,
L.P., an Ohio limited partnership ("Boykin LP"), Boykin Acquisition Corporation
I, Inc., an Ohio corporation and a wholly owned subsidiary of Parent ("Newco
I"), Boykin Acquisition Corporation II, Inc., an Ohio corporation and a wholly
owned subsidiary of Parent ("Newco II"), and Boykin Acquisition Partnership,
L.P., a Delaware limited partnership ("Merger Sub"), pursuant to which the
Merger Sub will be merged with and into the Partnership (the "Merger"). The
Merger Agreement and the Merger were unanimously approved by the board of
directors of Parent. The Merger is expected to close in March 1998.
As a result of the Merger (which will be a taxable
transaction), (i) each issued and outstanding limited partnership unit of the
Partnership (each a "Unit" and collectively, the "Units") will be converted into
the right to receive a pro rata portion per Unit of that portion of the Cash
Consideration (as defined below) and that portion of the Share Consideration (as
defined below) allocated to the holders of the Units pursuant to the allocation
schedule attached to the Merger Agreement (the "Allocation Schedule") and (ii)
the General Partner's general partnership interest in the Partnership will be
converted into the right to receive that portion of the Cash Consideration and
that portion of the Share Consideration allocated to the General Partner
pursuant to the Allocation Schedule. "Cash Consideration" means an amount in
cash equal to approximately $35.3 million minus the amount of cash required to
be paid to the General Partner, in its capacity as the general partner of the
Subsidiary Partnership, pursuant to the Assignment Agreement (as defined below).
"Share Consideration" means that number of Common Shares, without par value, of
Parent (the "Parent Common Shares") equal to approximately 3.1 million minus the
number of the Parent Common Shares required to be issued to the General Partner,
in its capacity as the general partner of the Subsidiary Partnership, pursuant
to the Assignment Agreement. Based upon the closing price of the Parent Common
Shares on December 30, 1997, the Share Consideration and the Cash Consideration
equal $115.4 million, or $26.37 for each Unit. Because the number of Parent
Common Shares to be issued in the Merger is fixed, and because of the General
Partner's interest, the total value of the Share Consideration and the Cash
Consideration to be received by the holders of the Units will be based upon the
price of the Parent Common Shares at the closing of the Merger. The Merger is
conditioned upon, among other things, approval by the holders of a majority of
the outstanding Units of the Partnership and the holders of a majority of the
outstanding Parent Common Shares.
The Merger Agreement provides that the Partnership may not,
and the General Partner shall cause the Subsidiary Partnership not to, directly
or indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any person (other than Parent
and its affiliates) concerning any proposal for an acquisition of all or
substantially all of the business and properties or partnership units or
interests of the Partnership or the Subsidiary Partnership, whether by merger,
tender offer, purchase of assets or partnership units or otherwise (the
"Acquisition Proposal") (including any person with whom discussions or
negotiations have previously been held concerning any Acquisition Proposal),
subject to certain exceptions. If the Merger Agreement is terminated under
certain circumstances, the Partnership must (i) reimburse Parent and Boykin
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Management Company Limited Liability Company for certain out-of-pocket expenses
related to the negotiation, execution and delivery of the Merger Agreement and
the performance of the obligations contained therein and (ii) pay to Parent a
break-up fee of $5.5 million (subject to certain adjustments).
The Merger Agreement also provides that the Partnership will
pay a special distribution (the "Special Distribution") to the holders of the
Units and the General Partner immediately prior to the closing of the Merger
(the "Closing") in an amount such that the Special Distribution plus the accrued
dividend on the Parent Common Shares to be received by the holders of the Units
and the General Partner will equal the Partnership's existing distribution rate
prorated to the Closing. The Merger Agreement is filed as Exhibit 2.1 hereto and
is incorporated herein by reference.
Related Arrangements
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In connection with the execution of the Merger Agreement, each
of the Assignment Agreement, the Lease Agreement, the Termination Agreement, the
Management Agreement and the Owner Agreement (each as described below) were
executed on December 30, 1997.
The General Partner entered into a Partnership Interest
Assignment Agreement (the "Assignment Agreement") with Parent, Boykin LP and
West Doughboy LLC, an Ohio limited liability company (the "GP Assignee"),
pursuant to which, among other things, the General Partner will sell and assign
to the GP Assignee the General Partner's 1% general partnership interest in the
Subsidiary Partnership on the closing of the Merger. The Assignment Agreement is
filed as Exhibit 99.1 hereto and is incorporated herein by reference.
The Subsidiary Partnership entered into a Percentage Lease
Agreement (the "Lease Agreement") with Westboy LLC, an Ohio limited liability
company (the "Lessee"), effective as of January 1, 1998, pursuant to which,
among other things, the Subsidiary Partnership will lease or sublease, as
applicable, to Lessee all of the hotels (the "Hotels") owned or leased by the
Subsidiary Partnership. The Lease Agreement is filed as Exhibit 99.2 hereto and
is incorporated herein by reference.
The Subsidiary Partnership entered into a Termination of
Management Agreement (the "Termination Agreement") with Red Lion Hotels, Inc., a
Delaware corporation (the "Manager"), pursuant to which the existing Management
Agreement dated as of April 6, 1987, as amended, between the Subsidiary
Partnership and Manager was terminated with no further force or effect. The
Termination Agreement is filed as Exhibit 99.3 hereto and is incorporated herein
by reference. Simultaneously, the Manager entered into a Management Agreement
(the "Management Agreement") with the Lessee, effective as of January 1, 1998,
pursuant to which, among other things, the Manager will manage and operate the
Hotels in which Lessee holds a leasehold estate pursuant to the Lease Agreement.
The Management Agreement is filed as Exhibit 99.4 hereto and is incorporated
herein by reference.
The Subsidiary Partnership entered into an Owner Agreement
(the "Owner Agreement") with the Lessee and the Manager, effective as of January
1, 1998, pursuant to which the Subsidiary Partnership commits to take certain
actions if Lessee breaches the Management Agreement. The Owner Agreement is
filed as Exhibit 99.5 hereto and is incorporated herein by reference.
A copy of the Joint Press Release dated as of December 30,
1997 issued by the Partnership and Parent relating to the Merger is filed as
Exhibit 99.6 and is incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) The following exhibits are filed as part of this Report.
Exhibit Number Description
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2.1 Agreement and Plan of Merger dated as of December 30, 1997 by
and among Red Lion Inns Limited Partnership, Red Lion
Properties, Inc., Red Lion Inns Operating L.P., Boykin Hotel
Properties, L.P., Boykin Lodging Company, Boykin Acquisition
Corporation I, Inc., Boykin Acquisition Corporation II, Inc.,
and Boykin Acquisition Partnership, L.P.
99.1 Partnership Interest Assignment Agreement dated as of December
30, 1997 by and among Red Lion Properties, Inc., Boykin Hotel
Properties, L.P., Boykin Lodging Company and West Doughboy
LLC.
99.2 Percentage Lease Agreement dated as of December 30, 1997 by
and between Red Lion Inns Operating L.P. and Westboy LLC
99.3 Termination of Management Agreement dated as of December 30,
1997 by and between Red Lion Inns Operating L.P. and Red Lion
Hotels, Inc.
99.4 Management Agreement dated as of December 30, 1997 by and
between Red Lion Hotels, Inc. and Westboy LLC.
99.5 Owner Agreement dated as of December 30, 1997 by and among Red
Lion Inns Operating L.P., Westboy LLC and Red Lion Hotels,
Inc.
99.6 Joint Press Release of Red Lion Inns Limited Partnership and
Boykin Lodging Company dated as of December 30, 1997.
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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 hereunto duly authorized.
Dated: January 8, 1998
BOYKIN LODGING COMPANY
By: /S/ Raymond P. Heitland
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Raymond P. Heitland
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Agreement and Plan of Merger dated as of December 30, 1997 by
and among Red Lion Inns Limited Partnership, Red Lion
Properties, Inc., Red Lion Inns Operating L.P., Boykin Hotel
Properties, L.P., Boykin Lodging Company, Boykin Acquisition
Corporation I, Inc., Boykin Acquisition Corporation II, Inc.,
and Boykin Acquisition Partnership, L.P.
99.1 Partnership Interest Assignment Agreement dated as of December
30, 1997 by and among Red Lion Properties, Inc., Boykin Hotel
Properties, L.P., Boykin Lodging Company and West Doughboy
LLC.
99.2 Percentage Lease Agreement dated as of December 30, 1997 by
and between Red Lion Inns Operating L.P. and Westboy LLC
99.3 Termination of Management Agreement dated as of December 30,
1997 by and between Red Lion Inns Operating L.P. and Red Lion
Hotels, Inc.
99.4 Management Agreement dated as of December 30, 1997 by and
between Red Lion Hotels, Inc. and Westboy LLC.
99.5 Owner Agreement dated as of December 30, 1997 by and among Red
Lion Inns Operating L.P., Westboy LLC and Red Lion Hotels,
Inc.
99.6 Joint Press Release of Red Lion Inns Limited Partnership and
Boykin Lodging Company dated as of December 30, 1997.
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