ATLANTA, June 2 (Reuters) - Hotel franchiser U.S. Franchise Systems Inc. (NasdaqNM:USFS) said Friday it plans
to repurchase about 43 percent of its common stock in a transaction worth about $65 million as part of an agreement
with Chicago's Pritzker family, which will invest in the company.
Under the terms of the initiative, U.S. Franchise will pay $7.50 for 8.66 million of its 19.95 million shares outstanding.
The Pritzker family will then invest $75 million in the company in exchange for $65 million of newly created 8.5
percent redeemable preferred stock and $10 million in 6 percent preferred stock.
The move to recapitalise the company, which franchises the Microtel Inn & Suites, Hawthorn Suites and Best
Inns & Suites hotel chains, comes at a time when its shares are trading near their 52-week low of 3-3/4.
When the transaction is complete, the Pritzker family, together with U.S. Franchise chairman and chief executive
Mike Leven and others will collectively control a majority of the outstanding voting power of the company, U.S.
Franchise said.
The transaction, which is subject to conditions including the tender of at least three million shares, is expected
to be complete in the fourth quarter.