Press Release: Lodgian, Inc.
October 16, 2000
ATLANTA, GA -- Lodgian, Inc., (NYSE: LOD) reported Friday that it has sent a letter to its shareholders providing
them with important information to consider relating to the proposal announced yesterday to sell Lodgian. As stated
in the earlier announcement, the Company has postponed its annual shareholder meeting until Friday, October 20,
2000. The meeting will be held at 9:30 a.m., local time, at The Resource Forum, 3340 Peachtree Road, N.E., Atlanta,
Georgia. The letter, from Chief Executive Officer Robert S. Cole and Chairman Joseph C. Calabro, clarifying the
terms of sale proposal, is as follows:
Whitehall Street Real Estate Limited Partnership XIII and Whitehall Parallel Real Estate Limited Partnership XIII
(collectively, ``Whitehall'') have made a proposal to the Lodgian board for a subsidiary of Whitehall to acquire
all of the outstanding shares of the Company for a cash purchase price of $4.50 per share, subject to certain adjustments
and Lodgian's right to terminate the transaction if adjustments would result in shareholders receiving less than
$4.00 per share. The proposal from Whitehall is a result of the process of evaluating strategic alternatives that
we announced earlier this year and resulted from extensive negotiations over the last several months. Whitehall
is the most recent real estate investment fund sponsored by Goldman, Sachs & Co. The final terms of any transaction
must be approved by the board and, thereafter, by our shareholders.
We have also granted Whitehall an exclusive period of 60 days to conduct confirmatory due diligence and negotiate
definitive agreements for the transaction. If, at the end of the due diligence period, we have not entered into
definitive agreements for the transaction, Lodgian's only obligation to Whitehall will be to reimburse Whitehall
the expenses it incurred in evaluating and pursuing the transaction, up to a maximum of $3,500,000. Please keep
in mind that our exclusivity agreement with Whitehall permits us during this 60 day period to consider unsolicited
offers from third parties (including the Yung group) and to provide information to third parties in response to
an offer or indication of interest if we determine that the third party's offer is more favorable to the Company's
stockholders than the Whitehall proposal and is likely to be consummated and the third party executes a confidentiality
and standstill agreement substantially similar to that executed by Whitehall. Further details about the Whitehall
proposal and the exclusivity agreement are included in our Form 8-K filing with the Securities and Exchange Commission
a copy of which is enclosed with this mailing.
As we have previously communicated to you, if Lodgian receives a fair and fully financed offer to acquire the Company,
your board is committed to a sale of Lodgian. The proposal from Whitehall is consistent with this commitment and
we will consider a transaction with any qualified party. However, we do not believe that electing Mr. Yung and
his nominees to your board will facilitate maximization of shareholder value. We believe that electing the Yung
group will only put Mr. Yung in a position to interfere with the process relating to the Whitehall proposal and
will not help us to obtain the best possible price for Lodgian. We believe maximizing shareholder value can occur
if the Yung group remains an unaffiliated third party and, if the Yung group wishes, becomes part of a competitive
sale process. Therefore, we urge you to reject Mr. Yung's handpicked nominees!
We believe your best interests will be served by electing the nominees of your board and allowing your board to
pursue this promising transaction and any other potential transaction. We urge you to sign, date and mail the enclosed
white proxy card today. Please discard any green proxy card sent to you by the Yung group or its agents.
Thank you for your continued support.
About Lodgian
Lodgian, Inc. owns or manages a portfolio of 117 hotels with approximately 21,700 rooms in 32 states and Canada.
The hotels are primarily full service, providing food and beverage service, as well as meeting facilities. Substantially
all of Lodgian's hotels are affiliated with nationally recognized hospitality brands such as Holiday Inn, Crowne
Plaza, Marriott, Sheraton, Hilton, Doubletree and Westin.
Lodgian's common shares are listed on the New York Stock Exchange under the symbol ``LOD''. Lodgian is a component
of both the Russell 2000® Index, representing small cap stocks, and the Russell 3000® Index, representing
the broader market.
Forward-Looking Statements
Note: Statements in this press release that are not strictly historical are ``forward-looking'' statements that
are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks, which may cause the Company's actual results in the future to differ
materially from expected results. These risks include, among others, the termination of the letter of intent, competition
within the lodging and contract service industries; the relationship between supply and demand for hotel rooms;
the effects of economic conditions; issues associated with the ongoing integration of the former Servico, Inc.
and Impac Hotel Group, LLC; the acquisition and renovation of existing hotels and the development of new hotels;
operating risks; the cyclical nature of the lodging industry; risks associated with the dependence on franchisers
of the Company's lodging properties; and the availability of capital to finance planned growth, as described in
the Company's filings with the Securities and Exchange Commission.
For more information on Lodgian toll-free via fax, dial 1-800-PRO-INFO (1-800-776-4636),follow the voice menu prompts
and enter the company ticker LOD (or 563)or visit the Lodgian page on the FRB web site at www.frbinc.com
.
Visit Lodgian at www.lodgian.com .
SOURCE: Lodgian, Inc.