Press Release: MeriStar Hotels & Resorts
August 1, 2002
WASHINGTON & PITTSBURGH -- MeriStar Hotels & Resorts (NYSE: MMH) and Interstate Hotels Corporation (Nasdaq:
IHCO) yesterday completed their previously announced merger.
Stockholders of both companies approved the merger at separate stockholder meetings on July 30. At the MeriStar
stockholder meeting on July 30, MeriStar stockholders also approved a one-for-five reverse stock split, which was
effected after the close of trading on July 31. As a result, the combined company, Interstate Hotels & Resorts,
Inc. (NYSE: IHR) will begin trading on August 1 on a post-split basis.
"With over 400 hotels and approximately 86,000 rooms under management, our size gives us significant economies
of scale advantages and the ability to attract the most talented personnel in the industry," said Paul Whetsell,
chairman and chief executive officer. "Our vast operations experience has enabled us to develop superior technology
and advanced proprietary management and marketing systems. Interstate Hotels & Resorts' property owners will
have the most effective and efficient operations systems at their disposal."
Under the merger agreement between MeriStar and Interstate, the exchange ratio between Interstate Hotels &
Resorts stock and Interstate stock was 4.6. However, after giving effect to the one-for-five reverse stock split
that was effected on July 31, Interstate stockholders are entitled to receive 0.92 of a share of Interstate Hotels
& Resorts stock for each share of Interstate stock held by such Interstate stockholder. MeriStar stockholders
are entitled to receive one share of Interstate Hotels & Resorts stock for every five of their MeriStar shares.
The exchange of MeriStar Hotels & Resorts shares and Interstate Hotels Corporation shares for Interstate Hotels
& Resorts shares is tax free, except to the extent stockholders receive cash instead of fractional shares.
The combined company will be headquartered in Washington and will maintain an operating presence in Pittsburgh.
Paul W. Whetsell, MeriStar chairman and chief executive officer, and John Emery, MeriStar president and chief operating
officer, will continue in those roles for the combined company. Thomas F. Hewitt, the previous chairman and chief
executive officer of Interstate Hotels Corporation, will serve on the combined company's board of directors.
Interstate Hotels & Resorts will comprise hotel management and BridgeStreet Corporate Housing Worldwide. The
hotel management business unit will use its expanded resources to provide current and prospective owners with a
wide array of improved services and benefits, including Internet-based business information systems providing real-time
data for better yield management and cost control; broader electronic and direct sales resources, including more
than 2,000 sales professionals; increased cost efficiencies through national purchasing; and capital for co-investments
and joint ventures.
BridgeStreet's growth strategy involves expansion of its national client base and European operations, as well
as its recently established licensing program for North American markets.
Interstate Hotels & Resorts is the nation's largest independent hotel management company, operating approximately
86,000 rooms in more than 400 hotels, representing over 30 franchise brands in North America and Europe. For more
information about Interstate Hotels & Resorts, visit the company's new Web site, www.ihrco.com.
This press release contains "forward-looking statements," within the meaning of the Private Securities
Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future
operating results, business growth and the timing and composition of revenues, among others, and statements containing
words such as "expects," "believes" or "will," which indicate that those statements
are forward-looking. Except for historical information, the matters discussed in this press release are forward-looking
statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially,
including the current slowdown of the national economy, economic conditions generally and the real estate market
specifically, the impact of the events of September 11, 2001, legislative and regulatory changes, availability
of debt and equity capital, interest rates, competition, supply and demand for lodging facilities in Interstate
Hotels & Resorts' current and proposed market areas and risks and uncertainties associated with the integration
of the two merged companies. Additional risks are discussed in Interstate Hotels & Resorts' filings with the
Securities and Exchange Commission, including its registration statement on Form S-4 relating to the merger.
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Contact:
MeriStar Hotels & Resorts, Washington
Corporate Communications:
Melissa Thompson, 202/295-2228
or
Media:
Daly Gray Public Relations, Virginia
Jerry Daly/Carol McCune, 703/435-6293
or
Interstate Hotels Corporation, Pittsburgh
Media:
Tom Loftus, 412/937-3382
Investor Relations:
Lisa O'Connor, 412/937-3319