MeriStar Hospitality to Sell 10 Florida Assets
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MeriStar Hospitality to Sell 10 Florida Assets
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Category: North America & West Indies / Carribean islands -
This is a press release selected by our editorial committee and published online for free on 2006-02-03
MeriStar Hospitality Corporation (NYSE: MHX),
one of the nation’s largest hotel real estate investment trusts (REIT), today announced that it has
signed a definitive agreement to sell a portfolio of nine hotels (1,948 rooms) and a golf and
tennis club, all located in Florida, to an affiliate of The Blackstone Group for approximately
$367 million in cash, subject to certain adjustments and satisfaction of customary closing
conditions. The company expects the transaction to close by the end of the first quarter 2006.
The company intends to use the majority of the proceeds to further reduce debt, particularly its
most expensive 10.5 percent senior unsecured debt, which currently is callable by the company.
The properties to be sold include:
• Best Western Sanibel Island Beach Resort (46 rooms)
• The Dunes Golf & Tennis Club
• Hilton Cocoa Beach Oceanfront (296 rooms)
• Hilton Clearwater Beach Resort (426 rooms)
• Sanibel Inn (96 rooms)
• Seaside Inn (32 rooms)
• Sheraton Beach Resort Key Largo (200 rooms)
• Song of the Sea (30 rooms)
• South Seas Island Resort (579 rooms)
• Sundial Beach Resort (243 rooms)
“We expect this portfolio sale to generate significant benefits for our shareholders by
allowing us to accelerate our business plan objectives of repaying our more expensive debt and completing property upgrades,” said Paul Whetsell, chairman and CEO. “Furthermore, with the
closing of this transaction, our asset disposition program will be nearly complete. As a result of
this transaction we will have significantly greater financial flexibility and greater visibility on the
timing of restoring a regular cash dividend to our common shareholders. We are pleased to be
able to take advantage of the strong real estate market in Florida and unlock the substantial
values in these assets for our shareholders.” The sales price reflects an EBITDA multiple for the
10 properties that is accretive to the company’s current trading value.
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