Hospitality Properties Trust Announces Plan to Acquire Royal Sonesta Hotels in Cambridge and New Orleans
NEWTON, Mass.--(BUSINESS WIRE)--
Hospitality Properties Trust (NYSE: HPT) today announced that it has
entered into agreements to acquire the entities which own the Royal
Sonesta Hotel in Cambridge, MA (400 keys, 2 restaurants/bars and 22,000
sq.ft. of meeting space) and lease the Royal Sonesta Hotel in New
Orleans, LA (483 keys, five restaurants/bars and 20,000 sq.ft. of
meeting space) for approximately $150.5 million.
The Cambridge and New Orleans hotels are currently operated by Sonesta
International Hotels Corporation (NASDAQ GLOBAL: SNSTA). The Cambridge
hotel is owned by a SNSTA subsidiary and the New Orleans hotel is leased
by a SNSTA subsidiary. HPT's acquisition is a component part of a
transaction that involves the acquisition by merger of all of SNSTA's
shares by Sonesta Acquisition Corp. ("SAC"), an affiliate of Reit
Management & Research LLC ("RMR"), the manager of HPT. Upon completion
of the merger, SAC will transfer the entities which own the Cambridge
hotel and lease the New Orleans hotel to HPT, and HPT expects to prepay
an existing mortgage encumbering the Cambridge hotel, which mortgage
amount is included in the purchase price above. Prior to completion of
the merger, SAC will be capitalized independently from HPT with $25
million. The transaction is expected to close during the first quarter
After the merger and sale to HPT of the entities which own the Cambridge
hotel and lease the New Orleans hotel, SAC will retain the existing
management business of SNSTA and these hotels will continue to be
managed by the same management team which now operates these two hotels.
Also, SAC and its Sonesta management team will be available to operate
other hotels for HPT, including certain hotels HPT now owns and it is
considering rebranding and hotels it may selectively acquire in the
future. Because RMR and SAC are affiliated, the purchase price for the
Cambridge and New Orleans hotels and the terms of the management
contracts for these hotels were approved by Independent Trustees of HPT
who are not owners, employees or otherwise affiliated with RMR.
John G. Murray, President of HPT, made the following statement at the
time of this announcement:
"HPT is pleased to be adding the Sonesta management team to the hotel
operators with whom it does business. Sonesta is a niche brand with a
strong reputation for high quality accommodations and guest services.
HPT looks forward to working with Sonesta personnel to expand the
Duff & Phelps LLC provided certain valuation services to the Independent
Trustees of HPT. Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP
and at Sullivan & Worcester LLP represented SAC and HPT, respectively.
Hospitality Properties Trust is a real estate investment trust, or REIT,
which owns 288 hotels and 185 travel centers located throughout the
United States and in Ontario, Canada and Puerto Rico. HPT is
headquartered in Newton, MA.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE
MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND
OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON
HPT'S PRESENT BELIEFS AND EXPECTATIONS BUT THEY ARE NOT GUARANTEED TO
OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, INCLUDING SOME REASONS
BEYOND HPT'S CONTROL. FOR EXAMPLE:
THIS PRESS RELEASE STATES THAT HPT HAS ENTERED AGREEMENTS EXPECTED TO
RESULT IN THE ACQUISITION OF ENTITIES WHICH OWN THE ROYAL SONESTA
HOTEL IN CAMBRIDGE, MA AND LEASE THE ROYAL SONESTA HOTEL NEW ORLEANS,
LA. THE IMPLICATION OF THIS STATEMENT IS THAT HPT WILL ACQUIRE THESE
HOTELS. IN FACT, THESE ACQUISITIONS ARE PART OF A COMPLEX TRANSACTION
INVOLVING THE ACQUISITON BY SAC OF SHARES OF SNSTA AND A MERGER. A
HIGHER BID MAY BE RECEIVED BY SNSTA OR THE FAILURE OF CERTAIN MERGER
CONDITIONS MAY CAUSE THE MERGER TO FAIL. IF THE MERGER DOES NOT OCCUR,
HPT WILL NOT ACQUIRE THESE HOTELS. HPT HAS LIMITED CONTROL OVER
WHETHER SNSTA RECEIVES A HIGHER BID OR WHETHER THE PROPOSED MERGER
THIS PRESS RELEASE STATES THAT SAC AND THE ENTITY EXPECTED TO MANAGE
THE HOTELS TO BE ACQUIRED ARE AFFILIATES OF RMR AND THAT THE HOTELS'
PURCHASE PRICE AND THE TERMS OF THE MANAGEMENT CONTRACTS WERE APPROVED
BY THE INDEPENDENT TRUSTEES OF HPT WHO ARE NOT OWNERS, EMPLOYEES OR
OTHERWISE AFFILIATED WITH RMR. AN IMPLICATION OF THESE STATEMENTS MAY
BE THAT THESE AGREEMENTS BETWEEN HPT AND SAC MAY BE CONSIDERED ARMS
LENGTH TRANSACTIONS. RMR MANAGES HPT, AND HPT'S MANAGING TRUSTEES ARE
OWNERS, DIRECTORS AND OFFICERS OF RMR AND OF SAC. THE INDEPENDENT
TRUSTEES OF HPT ARE ALSO INDEPENDENT TRUSTEES OR INDEPENDENT DIRECTORS
OF OTHER PUBLICLY OWNED COMPANIES MANAGED BY RMR. ACCORDINGLY, THESE
AGREEMENTS MAY IMPLICATE THE RISKS ASSOCIATED WITH RELATED PARTY
TRANSACTIONS. FOR A MORE DETAILED DESCRIPTION OF THE RELATIONSHIPS
BETWEEN HPT AND RMR AND THE RISKS WHICH MAY ARISE FROM SUCH
RELATIONSHIPS PLEASE SEE HPT'S ANNUAL REPORT ON FORM 10K FOR THE YEAR
ENDED DECEMBER 31, 2010, ESPECIALLY THE SECTIONS TITLED "RISK FACTORS"
AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS --- RELATED PERSON TRANSACTIONS", AND HPT'S
DEFINITIVE PROXY STATEMENT FOR HPT'S 2011 ANNUAL MEETING DATED
FEBRUARY 22, 2011, ESPECIALLY THE SECTION TITLED "RELATED PERSON
TRANSACTIONS AND COMPANY REVIEW OF SUCH TRANSACTIONS"; WHICH ANNUAL
REPORT AND PROXY STATEMENT ARE AVAILABLE AT THE WEBSITE OF THE U.S.
SECURITIES AND EXCHANGE COMMISSION, OR THE SEC: WWW.SEC.GOV.
THIS PRESS RELEASE STATES THAT SAC MAY MANAGE ADDITIONAL HOTELS NOW
OWNED, OR WHICH MAY BE ACQUIRED, BY HPT AND A STATEMENT THAT HPT LOOKS
FORWARD TO WORKING WITH SONESTA PERSONNEL TO EXPAND THE SONESTA BRAND.
AN IMPLICATION OF THESE STATEMENTS IS THAT HPT WILL REBRAND HOTELS IT
OWNS TO BE OPERATED AS SONESTA HOTELS AND HPT WILL PURCHASE ADDITIONAL
HOTELS WHICH MAY BE BRANDED AND OPERATED AS SONESTA HOTELS. THERE ARE
NUMEROUS CONTINGENCIES ASSOCIATED WITH ANY EXPANSION OF HPT'S
INVESTMENTS IN HOTELS BRANDED AND OPERATED AS SONESTA HOTELS: HPT IS
CURRENTLY IN DISCUSSIONS WITH THIRD PARTIES ABOUT SELLING AND
REBRANDING CERTAIN HOTELS IT OWNS AND THOSE DISCUSSIONS MAY LEAD TO
SUCCESSFUL TRANSACTIONS; AND HPT MAY BE UNABLE TO LOCATE ADDITIONAL
HOTELS TO PURCHASE ON ACCEPTABLE TERMS. MANY OF THE CONTINGENCIES
ASSOCIATED WITH HPT'S REBRANDING OF HOTELS AND ACQUISITIONS INVOLVE
DECISIONS BY THIRD PARTIES WHICH ARE BEYOND HPT'S CONTROL. ALSO, HPT
HAS ENTERED LONG TERM BRANDING CONTRACTS FOR MOST OF THE HOTELS IT NOW
OWNS. ACCORDINGLY, HPT CAN NOT PROVIDE ANY ASSURANCE THAT IT WILL
PURCHASE ANY ADDITIONAL HOTELS OR OTHERWISE EXPAND ITS INVESTMENT IN
SONESTA BRANDED HOTELS.
FOR THE FOREGOING REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO
PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS
RELEASE. EXCEPT AS MAY BE REQUIRED BY LAW, HPT DOES NOT INTEND TO IMPLY
THAT IT HAS UNDERTAKEN ANY OBLIGATION TO MAKE UPDATES TO THE FORWARD
LOOKING STATEMENTS IN THIS PRESS RELEASE.
IMPORTANT ADDITIONAL INFORMATION
IN CONNECTION WITH THE PROPOSED MERGER, HPT EXPECTS THAT SNSTA WILL FILE
RELEVANT MATERIALS WITH THE SEC, INCLUDING A PROXY STATEMENT. INVESTORS
AND SECURITY HOLDERS OF SNSTA ARE URGED TO READ THESE DOCUMENTS (IF AND
WHEN THEY BECOME AVAILABLE) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SNSTA, THE
PROPOSED TRANSACTIONS AND THE PARTIES TO THE PROPOSED TRANSACTIONS.
INVESTORS AND SECURITY HOLDERS MAY OBTAIN THESE DOCUMENTS (AND ANY OTHER
DOCUMENTS FILED BY SNSTA, HPT AND SAC WITH THE SEC) FREE OF CHARGE AT
THE SEC'S WEBSITE AT WWW.SEC.GOV. IN ADDITION, THE DOCUMENTS FILED WITH
THE SEC BY SNSTA MAY BE OBTAINED FREE OF CHARGE BY DIRECTING SUCH
REQUEST TO: BOY VAN RIEL, VICE PRESIDENT AND TREASURER OF SNSTA AT (617)
421-5444, OR BY ACCESSING SONESTA'S INVESTOR INFORMATION WEBSITE AT
. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE SNSTA PROXY
STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE
SNSTA, SAC AND HPT AND EACH OF THEIR RESPECTIVE DIRECTORS, TRUSTEES AND
EXECUTIVE OFFICERS MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION
OF PROXIES FROM SNSTA'S STOCKHOLDERS IN RESPECT OF THE PROPOSED MERGER.
STOCKHOLDERS MAY OBTAIN INFORMATION REGARDING PARTICIPANTS IN THE
SOLICITATION OF PROXIES FROM SNSTA'S STOCKHOLDERS IN RESPECT OF THE
PROPOSED MERGER, AND THEIR RESPECTIVE INTERESTS WITH RESPECT TO THE
PROPOSED MERGER, BY READING THE DEFINITIVE PROXY STATEMENT AND OTHER
RELEVANT DOCUMENTS REGARDING THE PROPOSED TRANSACTIONS, WHEN THEY ARE
FILED WITH THE SEC.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the New York Stock Exchange.
shareholder, Trustee or officer is personally liable for any act or
obligation of the Trust.
Hospitality Properties Trust
Timothy A. Bonang, 617-796-8232
President, Investor Relations
Carlynn Finn, 617-796-8232
Manager, Investor Relations
Source: Hospitality Properties Trust
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