John Q. Hammons Hotels, Inc. Announces Execution of Merger Agreement
15 Junho 2005 - 9:21AM
Business Wire
John Q. Hammons Hotels, Inc. (AMEX:JQH) announced today that it has
entered into a definitive Agreement and Plan of Merger with JQH
Acquisition LLC. The merger agreement provides that, upon the
consummation of the merger, each outstanding share of the Company's
class A common stock will convert into the right to receive $24.00
cash per share. The merger is conditioned upon, among other things,
approval by the Company's stockholders at a special meeting called
for that purpose. The Company's principal stockholder, Mr. John Q.
Hammons, has agreed to vote his shares of capital stock in favor of
the merger. The Company has reserved the right to also seek the
approval of the merger by the holders of a majority of shares of
the class A common stock who vote with respect thereto that are not
held by Mr. Hammons and his affiliates. A copy of the Agreement and
Plan of Merger will be available from the SEC in a filing being
made today by the Company. The merger agreement has been entered
into in connection with a series of transactions agreed to among
Mr. Hammons, JQH Acquisition LLC and their respective affiliates.
These transactions address a variety of ongoing arrangements
between the parties, including Mr. Hammons' continuing equity
ownership in the business and his ongoing, active leadership role
in the company managing the Company's properties. JQH Acquisition
LLC was formed for the purposes of the proposed transactions by
Jonathan Eilian. The transactions to be entered into by Mr. Hammons
will include the right to a credit facility backed by iStar
Financial Inc. secured by Mr. Hammons' equity ownership in the
business and certain other collateral. A copy of the amended and
restated transaction agreement describing these transactions will
be available from the SEC in a filing to be made by the Company in
the next few days. A special committee of independent directors of
the Company, comprised of three disinterested, non-management
directors, represented the Company in the negotiation of the merger
agreement and reviewed and approved the Transaction Agreement. The
Board of Directors of the Company, acting in part upon the
unanimous recommendation of the Special Committee, has approved the
merger. The Special Committee was advised by independent legal
counsel, and received a fairness opinion from its independent
financial advisor, Lehman Brothers Inc. Upon completion of the
merger, the registration of the Company's class A common stock
under the Securities Exchange Act of 1934, as amended, will
terminate. Commenting on the execution of the definitive merger
agreement, Mr. John Q. Hammons, Chairman and Chief Executive
Officer of the Company, said, "I am very pleased that the merger
agreement has been entered into after these many months of
negotiations. I believe that the proposed merger presents a great
opportunity for the Company, its stockholders and employees. I am
pleased to have these arrangements in place and to continue our
private development activities." Also commenting on the signing of
the merger agreement, the Chairman of the Special Committee, David
Sullivan, said, "I am very happy that we were able to resolve our
open issues and come to terms on a definitive agreement. The
Committee believes that the proposed purchase price represents a
fair price for the Company's stockholders and we are confident that
our Committee has conducted a fair process to ensure that outcome."
About John Q. Hammons Hotels, Inc. John Q. Hammons Hotels, Inc. is
a leading independent owner and manager of affordable upscale, full
service hotels located primarily in key secondary markets. The
Company owns 46 hotels located in 20 states, containing 11,370
guest rooms or suites, and manages 14 additional hotels located in
seven states containing 3,158 guest rooms or suites. The majority
of these 60 hotels operate under the Embassy Suites, Holiday Inn
and Marriott trade names. Most of the hotels are located near a
state capitol, university, convention center, corporate
headquarters, office park or other stable demand generator.
Additional information is available at the Company's web site:
http://www.jqh.com. This press release is for informational
purposes only and is not an offer to buy or the solicitation of an
offer to sell any shares, nor is it a solicitation of a proxy to
vote in connection with the transaction. In connection with the
merger, the Company will file a proxy statement and other relevant
documents concerning the transaction with the SEC. The proxy
statement will be sent to the stockholders of the Company. Before
making any voting or investment decision with respect to the
merger, stockholders of the Company are urged to read the proxy
statement and any other relevant documents filed with the SEC when
they become available because they will contain important
information about the merger. In addition, documents filed with the
SEC by the Company will be available free of charge at the SEC's
web site at www.sec.gov. You may also read and copy any reports,
statements and other information filed by the Company at the SEC
public reference rooms at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Each of the Company, JQH Acquisition LLC
and Mr. Hammons and their respective executive officers and
directors may be deemed to be participants in the solicitation of
proxies from Company stockholders in favor of the merger. Certain
executive officers and directors of the Company have interests in
the merger, including, among others: certain transaction agreements
to be entered into between JQH Acquisition LLC and its affiliates
and Mr. Hammons and his affiliates; change of control payments;
payments for stock options; and their ownership of the Company's
class A common stock. These interests will be described in the
proxy statement when it becomes available.
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