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EXHIBIT 99.6
[RED LION INNS LIMITED PARTNERSHIP LETTERHEAD]
NEWS
FOR IMMEDIATE RELEASE
Contact:
Red Lion Inns Limited Partnership Boykin Lodging Company
Anupam Narayan Raymond P. Heitland
Senior Vice President & Treasurer Chief Financial Officer
Phone: (602) 681-3544 Phone: (216) 241-6375
David Trumble Paul O'Neil
Director, Corporate Communications Treasurer
Phone: (602) 220-6822 Phone: (216) 241-6375
BOYKIN LODGING COMPANY AND RED LION INNS LIMITED PARTNERSHIP
ANNOUNCE A DEFINITIVE AGREEMENT TO MERGE
PHOENIX, December 30, 1997 -- Boykin Lodging Company (NYSE: BOY) has
agreed to acquire Red Lion Inns Limited Partnership (AMEX: RED) and its
subsidiary partnership in a transaction valued, including assumed liabilities,
at approximately $272 million. With this acquisition, Boykin will acquire ten
full-service Doubletree branded hotels managed by Doubletree. The transaction
is conditioned upon the approval of Red Lion's unitholders and Boykin's
stockholders and is expected to close in March 1998.
Under the terms of the agreement, Boykin will pay approximately $35.3
million in cash and issue 3.1 million shares for all of the outstanding
partnership interests in Red Lion's subsidiary partnership in a taxable
transaction. Based upon Tuesday's closing price for Boykin's stock, the
aggregate equity consideration equals $115.4 million, or $26.37 for each
limited partner unit in Red Lion. The allocation of amounts between the general
partner and the limited partners of Red Lion are based on a formula contained
in the Red Lion partnership agreement. Because the number of shares of Boykin
stock to be issued in the transaction is fixed, and because of the general
partner's interest, the total value of the consideration to be received by the
limited partners will be based upon the price of Boykin's stock at closing. The
cash portion of the purchase price is expected to be funded with proceeds from
Boykin Lodging's $150 million credit
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410 NORTH 44TH STREET, SUITE 700 * PHOENIX, ARIZONA 85008 * (602) 220-6666
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Red Lion Inns, L.P.
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facility and/or new senior debt secured by the Red Lion properties. Boykin
Lodging plans to invest $10 million in capital expenditures for renovation and
improvement of the properties.
Red Lion intends to pay its regularly scheduled distribution for the
quarter ended December 31, 1997. The merger agreement also provides that Red
Lion will pay a special distribution immediately prior to the closing of the
transaction in an amount such that the special distribution plus the accrued
dividend on the Boykin stock to be received by the unitholders will equal to
Red Lion Inns existing distribution rate prorated to the closing.
"We are very pleased to announce our plans to acquire Red Lion Inns
Limited Partnership," said Robert W. Boykin, chairman, president and chief
executive office of Boykin Lodging Company. "This acquisition represents a
tremendous growth opportunity for us. The ten hotels that we are acquiring give
us a powerful presence in strong and expanding commercial markets in growing
western cities such as Seattle, Portland, Sacramento, Boise, Colorado Springs
and Omaha. We believe that the hotels will benefit significantly from
Doubletree's superior management team, sales and marketing capabilities, and
national brand recognition. Looking forward to 1998, we expect this transaction
to be accretive to our Funds From Operations as these properties as the
reflagging hits stride and REVPAR grows."
"This transaction is mutually beneficial to both of our companies," said
Richard M. Kelleher, president of Red Lion Properties, Inc., the general
partner of Red Lion Inns Limited Partnership. "The special committee of the
general partner board evaluated several proposals for the sale of the assets of
the Red Lion Inns Limited Partnership and has presented us with an opportunity
that maximizes value for our unitholders."
Mr. Boykin continued, "In addition to adding ten very strong, profitable
full-service hotels to our portfolio, this acquisition represents an
opportunity for us to develop a meaningful strategic relationship with Promus
Hotel Corporation, one of the nation's largest and most respected lodging
companies. The company owns, operates or franchises more than 1,200 hotels,
with approximately 177,000 rooms throughout the United States, Canada, Mexico
and Latin America. It is the franchisor and operator of the Doubletree Hotels
and Guest Suites, Embassy
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Suites, Homewood Suites, Club Hotels by Doubletree, Hampton Inn, Hampton Inn &
Suites, Embassy Vacation Resorts and Hampton Vacation Resorts brands. We look
forward to working with the company to maximize the profitability of our newest
hotels and pursuing opportunities that will enhance our portfolio of Doubletree
branded properties."
In May 1997, Red Lion Properties, Inc. created a special committee to
evaluate strategic alternatives in light of the upcoming changes in the Red
Lion Inns tax status as a master limited partnership effective January 1, 1998.
In July 1997, the special committee recommended a sale of Red Lion Inns, and
was authorized to pursue a sale. The special committee and the Board of
Directors of Red Lion Properties have both unanimously approved the sale, and
have recommended adoption and approval of the sale by Red Lion Inns'
unitholders.
Red Lion's hotel portfolio comprises ten upscale, full-service hotel
properties that range in size from 208 rooms to 476 rooms and contain a total
of 3,062 rooms. The hotels, which operated as "Red Lion Hotels" or "Red Lion
Inns," were reflagged in June 1997 to operate as "Doubletree Hotels." They are
located in growing commercial markets in Portland, Oregon (476 rooms at Lloyd
Center and 235 rooms downtown), Springfield, Oregon (234 rooms), Sacramento,
California (448 rooms), Boise, Idaho (304 rooms), Spokane Valley, Washington
(237 rooms), Bellevue, Washington (208 rooms), Yakima, Washington (208 rooms),
Colorado Springs, Colorado (299 rooms), and Omaha, Nebraska (413 rooms). The
hotels are situated in major traffic arteries that are near airports,
commercial centers and tourist sites. Each of the hotels offers full-service
accommodations, including meeting space, lounges, and banquet facilities, and
most have at least two restaurants. The hotels typically offer valet service,
swimming pools, health and fitness centers, concierge services, business
centers and complimentary airport shuttle services.
Boykin Lodging Company is a multi-tenant real estate investment trust
which focuses on the ownership of full-service, premium-branded commercial and
resort hotels. Boykin Lodging currently owns 17 commercial and resort
properties containing 4,566 rooms, located in California, Florida, Indiana, New
York, North Carolina, Minnesota, Maryland, Missouri and Ohio.
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Red Lion Inns Limited Partnership is the owner of ten hotels managed by
Doubletree as part of the Doubletree system of 258 hotels.
Safe Harbor Statement Under the Private Securities Litigation Reform
Act of 1995: The statements contained in this release which are not historical
facts, such as those concerning future financial performance and growth, are
forward looking statements that are subject to change based on various factors
which may be beyond Boykin's control. Accordingly, the future performance and
financial results may differ materially from those expressed or implied in any
such forward looking statements. Such factors include, but are not limited to,
those described in Red Lion's filings with the Securities and Exchange
Commission, as well as various factors related to the transaction described in
this release.
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