Hammons, Barcelo Go Their Separate Ways

SPRINGFIELD, MO-John Q. Hammons Hotels Inc. is entertaining all merger offers now that a prior agreement to negotiate exclusively with Barcelo Crestline Corporation has run out. The term of the agreement ran from late December 2004 through yesterday (Monday, Jan. 31). This morning, a new unsolicited offer was received by the special negotiating committee formed by the board of directors.David Sullivan, chairman of the special committee, says Hammons and Barcelo were “unable to resolve the open issues” and that there is now a new proposal on the table from another potential purchaser. “This proposal appears to have support from some of our current class A stockholder,” says Sullivan in a prepared statement, adding that the company remains committed “to providing a reasonable opportunity for any bona fide interested party.” In October, Barcelo Crestline offered to purchase the company for $13 per share. In late December, Barcelo Crestline had increased their offer to acquire the company’s Class A shares to $21 per share. “We are disappointed that the special committee..was unable to reach an agreement with us during this period of exclusivity,” Barcelo chief executive Simon Pedro Barcelo says in a prepared statement issued in response to the Hammons release. “Barcelo Crestline will not continue to pursue the merger.”Since Barcelo’s offer, the share price of John Q. Hammons Hotels has risen from $11 per share to more than $20 per share. Shares stood at $20.25 in afternoon trading today, up $0.15 on the day.Hammons independently owns and manages affordable upscale, full-service hotels located primarily in key secondary markets. The company owns 11,370 guest rooms in 46 hotels in 20 states and manages an additional 3,158 guest rooms in 14 hotels in seven states. The majority of the 60 hotels operate under the Embassy Suites Hotels, Holiday Inn and Marriott trade names, and most are located near a state capital, university, convention center, corporate headquarters, office park or other stable demand generator. Since September, the company’s share price has risen steadily from $10 per share to about $20 per share.

Barcelo Crestline Corp. is a hotel management and opportunistic real estate company formed in June 2002 with the acquisition of Crestline Capital Corp. by Barcelo Hotels & Resorts (Barcelo) of Spain. Crestline Capital Corp. was spun-off from Host Marriott Corp., a public company, on Dec. 29, 1998 when Host Marriott converted to a REIT. The company, along with its wholly owned subsidiary Crestline Hotels & Resorts, manages and leases over 125 hotels, resorts, conference and convention centers throughout the US.