Pittsburgh-based Interstate has been fending off a takeover by privately held Shaner Hotel Group since April 11, when the State College, PA-based firm offered $3 per share for 51% of the Interstate's class A common stock. The offer, already extended once, expired on Friday and Shaner officials say it will not be extended again. Shaner currently owns 6% of Interstate's class A stock, or 333,500 shares.
The Shaner proposal was rejected by Interstate's board under the advisement of Merrill Lynch and the company let it be known that it was open to other suitors. Shaner's proposal was made roughly three weeks before Interstate revealed its intention to acquire Washington, DC-based MeriStar. But Shaner publicly expressed confidence that he would prevail, criticizing the MeriStar deal and claiming that a Shaner-Interstate merger would be a more profitable deal for both companies.
If the Meristar merger is completed, the surviving company will keep the Interstate Hotels Corp. name and will operate more than 86,000 rooms in 412 hotels. The new entity would represent more than 30 franchise brands in North America and Europe as well as BridgeStreet Corporate Housing Worldwide and Doral Resorts & Conference Centers. Click here to read the original GlobeSt.com story.
By combining MeriStar's 277 managed hotels with Interstate's 135 properties, company officials say the surviving company will be the largest independent operator of full-service Marriott, Hilton and Sheraton hotels, operating properties in 45 states, the District of Columbia, Canada and Russia. The deal is expected to close in the third quarter of 2002. Interstate and MeriStar representatives did not return phone calls regarding this story by press time.
In revealing his decision not to pursue the takeover, CEO Shaner says, "although we endorsed a different solution, our team intends to actively monitor the MeriStar transaction." Shaner adds that his firm reserves the right to commence a new tender offer at any time and to solicit proxies at the Interstate shareholder meeting.
SHG, formed in 1983, owns 22 hotels, representing 10 different brands in 15 states.
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