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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO-C
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
INTERSTATE HOTELS CORPORATION
(Name of Subject Company (Issuer))
SHANER HOTEL GROUP LIMITED PARTNERSHIP
(potential offeror)
(Names of Filing Persons (identifying status as offeror,
issuer or other person))
Class A Common Stock, $0.01 par value per share
(Title of Class of Securities)
46088R108
(CUSIP Number of Class of Securities)
Lance T. Shaner
303 North Science Park Road
State College, Pennsylvania 16803
(814) 234-4460
(Name, address and telephone number of person authorized
to receive notices and communications)
With a copy to:
Leo A. Keevican, Jr., Esq.
DKW Law Group, PC
USX Tower, 58/th/ Floor
600 Grant Street
Pittsburgh, Pennsylvania 15219
(412) 355-2600
(Name, Address and Telephone Numbers of Person Authorized to Receive Notices and
Communications on Behalf of Filing Persons)
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
- --------------------------------------------------------------------------------
Not Applicable Not Applicable
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*Set forth the amount on which the filing fee is calculated and state how it was
determined.
(Continued on the following pages)
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[_] Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:_______________________
Form or Registration No:______________________
Filing Party:_________________________________
Date Filed:___________________________________
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[_] third-party tender offer subject to Rule 14d-1.
[_] issuer tender offer subject to Rule 13e-4.
[_] going-private transaction subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [_]
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THE FOLLOWING PRESS RELEASE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. THIS
PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO PURCHASE SHARES OF INTERSTATE
HOTELS CORPORATION OR A SOLICITATION STATEMENT UNDER THE RULES AND REGULATIONS
OF THE U.S. SECURITIES AND EXCHANGE COMMISSION. WHEN SHANER HOTEL GROUP LIMITED
PARTNERSHIP COMMENCES A TENDER OFFER IT WILL FILE WITH THE SEC A TENDER OFFER
STATEMENT. THAT STATEMENT, AND OTHER OFFER DOCUMENTS INCLUDED WITH THAT
STATEMENT, WILL CONTAIN IMPORTANT INFORMATION. SHAREHOLDERS OF INTERSTATE ARE
ADVISED TO CAREFULLY READ SUCH DOCUMENTS WHEN THEY BECOME AVAILABLE BEFORE
MAKING ANY DECISION WITH RESPECT TO THE TENDER OFFER.
THE TENDER OFFER STATEMENT, AND OTHER DOCUMENTS INCLUDED WITH THAT STATEMENT,
WILL BE MADE AVAILABLE TO SHAREHOLDERS OF INTERSTATE AT NO EXPENSE TO THEM.
SHAREHOLDERS OF INTERSTATE MAY OBTAIN A FREE COPY OF SUCH DOCUMENTS WHEN THEY
BECOME AVAILABLE, AND OTHER DOCUMENTS FILED BY INTERSTATE WITH THE SEC, AT THE
SEC'S WEBSITE AT www.sec.gov. FREE COPIES OF SUCH OFFER DOCUMENTS, WHEN THEY
BECOME AVAILABLE, MAY ALSO BE OBTAINED BY DIRECTING A REQUEST TO SHANER HOTEL
GROUP LIMITED PARTNERSHIP, 1965 WADDLE ROAD, STATE COLLEGE, PENNSYLVANIA 16803,
814.234.4460.
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Shaner Hotel Group Limited Partnership issued the following press release
on March 27, 2002.
SHANER MOVES FOR FIFTY-ONE PERCENT OF INTERSTATE'S PUBLIC STOCK
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Formal tender offer launched after Interstate scorns Shaner proposals
PITTSBURGH - March 27, 2002 - Shaner Hotel Group (SHG) today announced it
is initiating an all-cash tender offer for 2,472,822 shares of Class A common
stock of Interstate Hotels (NASDAQ: IHCO). Shaner, headquartered in State
College, Pa., currently holds approximately 326,000 Class A shares, a 5.94
percent stake in Interstate. The tender offer is for about 45 percent of the
Class A common stock and would result in Shaner owning approximately 51 percent.
Shaner has been attempting amicable negotiations with Interstate since January.
Shaner is offering $3 per share. Interstate closed yesterday, March 26, at
$2.14. Shaner has sufficient cash for the offer, which is not contingent on
financing.
Pittsburgh-based Interstate is one of the largest independent hotel-
management companies in the United States. The Interstate and Shaner hotel
management contracts that may be combined after the deal would represent more
than 150 properties and about 32,000 rooms in nearly all 50 states and several
international destinations.
"We are making this tender offer because we believe in the viability of
owning and operating hotels and motels," said Lance Shaner, chairman and CEO of
Shaner Hotel Group. "The acquisition of the common stock is a first step.
Shaner Hotel Group's ultimate goal is to restructure management and combine the
businesses to provide synergies and operating efficiencies that will boost the
long-term value of the company for its shareholders."
The offer includes some standard conditions, including a minimum of
2,472,822 shares of Class A common stock required for the tender; and that
Interstate's "poison pill" provision, which would dilute shares and prevent the
Shaner majority, must not be triggered by the transaction.
"We are hoping that Interstate's Board of Directors will waive the poison
pill provision, so that shareholders are not blocked from realizing the value of
their investments," said Shaner.
The expiration date of the tender offer is 5 p.m. Pittsburgh time on May 7,
2002 unless Shaner offers an extension. In this transaction, Shaner will not
purchase more than the 2,472,822 shares required to complete the acquisition.
On February 13, Interstate Hotels Corporation announced a fourth-quarter
loss of $3.1 million and a loss of $8 million for 2001. Interstate has not
posted a winning quarter or paid a common stock dividend for several years.
Since January 2002, Shaner Hotel Group has submitted three different
restructuring and acquisition proposals, including an all-cash offer earlier in
March, to acquire Interstate and reset a course for profitability and
shareholder value.
Interstate Blocked Shaner Plan from Shareholders
Interstate Chairman and CEO Thomas F. Hewitt has refused to meet with
Shaner for the past six weeks, and all Shaner's proposals have been rejected.
Shaner first attempted to buy struggling Interstate in October 2000, when
Interstate instead ratified a $25 million credit line from Lehman Brothers
Holdings Inc. Shaner contends the Lehman deal has not boosted Interstate's
position, as evidenced by Interstate's subsequent financial performance.
Interstate has refused to provide Shaner, one of its largest shareholders,
with a list of other shareholders, prohibiting Shaner from communicating its
offer directly to Interstate investors.
Stockholders are encouraged to read the tender offer statement when it's
available as it contains important information affecting their holdings. The
tender offer statement and other documents filed by Shaner with the Securities
and Exchange Commission will be available on the Commission's Web site
(www.sec.gov) soon.
About Shaner Hotel Group
The Shaner Hotel Group (SHG), with over $260 million in assets, is a
privately held fully integrated hotel company that specializes in the
acquisition, refurbishment, repositioning, development and long-term ownership
of full-service hotels. SHG also has extensive limited-service and extended-
stay experience. The company owns 22 hotels, representing 10 different hotel
brands in 15 states. Formed in 1983, SHG is headquartered in State College, Pa.
This press release may contain information that could constitute forward-
looking statements made within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Any such forward-looking
statements may involve risk and uncertainties that could cause actual results to
differ materially from any future results encompassed
within the forward-looking statements. Factors that could cause or contribute to
such differences include those matters disclosed in the Security and Exchange
Commission filings.