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UPDATE: Host Marriott, Starwood Rework $4B Merger Pact

BETHESDA, MD-Host Marriott goes public with an amendment to its merger agreement with Starwood Hotels & Resorts Worldwide Inc. The changes include lowering the cost to $3.76 billion, fewer hotels and not taking on $600 million of senior notes.

By Barbra Murray | Updated on March 28, 2006

BETHESDA, MD-Host Marriott Corp has just disclosed it’s signed an amendment to the merger agreement with Starwood Hotels & Resorts Worldwide Inc. As part of the original merger agreement, Host Marriott agreed to acquire 38 hotels from White Plains-based Starwood for about $4 billion. Under the new pact, the buyer is taking 35 hotels for about $3.76 billion.

Eliminated from the deal are three hotels in Canada, a change linked to tax issues, according to a press release issued this morning. The other alterations to the deal involve deferring closings for five hotels in Europe until after the merger and not assuming fiscal responsibility for Sheraton Holding Corp’s issuance of $600 million in senior notes, thereby lessening the debt involved in the takeover. The initial closing of the multibillion-dollar merger is on schedule to close April 10.

The hospitality giants revealed the sales transaction in November, two months after GlobeSt.com reported the two were in talks about a deal. Among the more notable properties that will switch ownership to Host Marriott when the deal closes are the 1,746-room Sheraton New York Hotel & Towers; the W New York, a 688-room property; the 1,216-room Sheraton Boston Hotel; the 1,044-room Sheraton San Diego Hotel & Marina; the Westin Seattle, an 891-room hotel; and the W Seattle, a 426-room facility.

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