Host Marriott Acquiring 38 Luxury and Upscale Hotels from Starwood for Approximately $4.04 billion
WASHINGTON, DC, November 14, 2005. Host Marriott Corporation announced today that it has signed a definitive merger agreement to acquire 38 luxury and upper upscale hotels from Starwood Hotels and Resorts ("Starwood") for approximately $4.04 billion. The portfolio consists of 25 domestic and 13 international properties and a total of 18,964 rooms managed under the Westin(R), Sheraton(R), W Hotels(R), The Luxury Collection(R) and St. Regis(R) brands*. As part of this transaction, the Company expects to assume approximately $700 million of debt and to issue approximately $2.3 billion of equity (133,529,412 common shares at the exchange price of $17.00 per share) to Starwood stockholders. The remainder of the purchase price will be paid in cash. The transaction is expected to close in the first quarter of 2006, and is subject to the approval of the Company's stockholders, as well as other closing conditions. The boards of directors of both companies have approved the proposed transaction.
Christopher J. Nassetta, president and chief executive officer, stated, "We are thrilled to announce this acquisition. We believe these assets represent one of the highest quality lodging portfolios available and they will complement our existing portfolio of outstanding hotels. We also believe that we acquired the portfolio at an attractive price that will be accretive to both our earnings and our credit and will add to the short-term and long- term value of the Company." Nassetta also added, "We are very excited about the opportunity to enhance and grow our relationship with Starwood, one of the premier innovative operating and brand companies in the lodging industry. We look forward to working with Starwood to maximize the value of these properties and intend to find additional opportunities that will benefit both companies shareholders."
Strong Portfolio
The portfolio assets are high-quality, luxury and upper upscale hotels with an average size of approximately 500 rooms and an expected RevPAR of $117 for 2005. Approximately 80% of the portfolio revenues are from properties in urban, convention or resort locations, six of which are city-center hotels with over 750 rooms. The portfolio is geographically diverse, with most assets located in markets with strong growth profiles and limited near-term supply. In addition, the Company is launching its expansion into Europe and increasing its presence in key domestic markets such as New York, Boston, San Diego and Seattle as a result of this acquisition.
"The Starwood portfolio fits our stated strategy of owning irreplaceable assets in premier markets with strong growth profiles and limited near-term supply," said James F. Risoleo, executive vice president of acquisitions and development.
Starwood Portfolio Asset Listing
(including # of rooms)
1 Sheraton New York Hotel New York NY USA 1,746
2 Sheraton Centre Toronto Hotel Toronto Canada 1,377
3 Sheraton Boston Hotel Boston MA USA 1,216
4 Sheraton San Diego Hotel & Marina San Diego CA USA 1,044
5 The Westin Seattle Seattle WA USA 891
6 Le Centre Sheraton Montreal Hotel Montreal Canada 825
7 The Westin Los Angeles Airport Los Angeles CA USA 740
8 W New York New York NY USA 688
9 Sheraton Roma Hotel & Conference Center Rome Italy 634
10 The Westin Indianapolis Indianapolis IN USA 573
11 Sheraton Indianapolis Hotel & Suites Indianapolis IN USA 560
12 The Westin Mission Hills Resort & Rancho Spa Mirage CA USA 512
13 The Westin Palace, Madrid, a Luxury Collection Hotel Madrid Spain 468
14 The Westin Cincinnati Cincinnati OH USA 456
15 Sheraton Stamford Hotel Stamford CT USA 448
16 The Westin Tabor Center Denver CO USA 430
17 W Seattle Seattle WA USA 426
18 The Westin South Coast Plaza Costa Mesa CA USA 390
19 Sheraton Milwaukee Brookfield Hotel Brookfield WI USA 389
20 Sheraton Santiago Hotel and Convention Center Santiago Chile 379
21 Sheraton Braintree Hotel Braintree MA USA 374
22 Sheraton Parsippany Hotel Parsippany NJ USA 370
23 Sheraton Skyline Hotel & Hayes United Conference Centre Kingdom 350
24 Sheraton Warsaw Hotel & Towers Warsaw Poland 350
25 The Westin Waltham-Boston Waltham MA USA 346
26 Sheraton Hamilton Hotel Hamilton Canada 301
27 Sheraton Fiji Resort Nadi Fiji 281
28 The Westin Royal Denarau Resort Nadi Fiji 273
29 The Westin Grand, Washington, D.C. Washington D.C. USA 263
30 Sheraton Suites Tampa Airport Tampa FL USA 259
31 Sheraton Needham Hotel Needham MA USA 247
32 St. Regis Hotel, Houston Houston TX USA 232
33 The Westin Palace, Milan, a Luxury Collection Hotel Milan Italy 228
34 Sheraton Tucson Hotel & Suites Tucson AZ USA 216
35 Sheraton Providence Airport Hotel Warwick RI USA 206
36 The Westin Europa & Regina, Venice Venice Italy 185
37 Capitol Hill Suites Washington D.C. USA 152
38 San Cristobal Tower a Luxury Collection Hotel Santiago Chile 139
Total Portfolio 18,964 rooms
This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," estimate," "expect," "intend," "may," "plan," predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results, statements about the expected scope and timing of the acquisition, expected earnings, FFO per diluted share and credit effects of the acquisition, consequences of management efforts, opportunities for growth and expectations as to timing, nature and terms of financing and other sources of funds. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete pending acquisitions and dispositions; and our ability to continue to satisfy complex rules in order for us to qualify as a real estate investment trust for federal income tax purposes and other risks and uncertainties associated with our business described in the Company's filings with the SEC. The completion of the transaction with Starwood (either in whole or in part relating to the acquisition of certain hotels) is subject to numerous closing conditions and there can be no assurances that the transactions as a whole, or portions of it will be completed. These closing conditions include, but are not limited to: the Company receiving approval from its stockholders to issue shares to Starwood's Class B holders, obtaining various lender consents and regulatory approvals, the accuracy of representations and warranties and compliance with covenants, the absence of material events or conditions, and other customary closing conditions. Our expectations as to the financial consequences of the acquisition may be affected by the risks noted above and factors unique to acquisitions, including the timing and successful integration these hotels into our portfolio and the number and location of the hotels we ultimately acquire with the acquisition. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of November 13, 2005, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
