Strategic Hotels & Resorts, Inc. Announces Pricing of Public Offering of 66 Million Shares of Common Stock

CHICAGO, May 13 /PRNewswire-FirstCall/ -- Strategic Hotels & Resorts, Inc. (the "Company") (NYSE: BEE) announced today that it priced its previously announced underwritten public offering of 66.0 million shares of its common stock (the "Offering") at $4.60 per share.  The Company has granted the underwriters a 30-day option to purchase up to 9.9 million additional shares of common stock to cover over-allotments, if any.  The Company estimates that the net proceeds from the Offering, after underwriting discounts and commissions and estimated offering expenses, will be approximately $289.6 million or approximately $333.1 million if the underwriters' over-allotment option is exercised in full.

J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and BofA Merrill Lynch are acting as joint book-running managers for the Offering, and Citigroup Global Markets Inc. and Raymond James & Associates, Inc. are acting as co-managers.  

The Company intends to use the net proceeds from the Offering to fund its concurrent tender offer for any and all of the outstanding 3.50% exchangeable senior notes due in 2012 of the Company's operating partnership, Strategic Hotel Funding, L.L.C. (the "Exchangeable Notes").  The closing of the Offering will satisfy the conditions in the tender offer that the Company receives at least $200 million in gross proceeds from the Offering.

The Company intends to use any remaining net proceeds from the Offering for general corporate purposes, including, without limitation, repurchasing from time to time in the open market or otherwise any remaining outstanding Exchangeable Notes, reducing borrowings under its secured bank credit facility, repaying other debt and funding capital expenditures and working capital.      

The Offering is expected to close on May 19, 2010, subject to customary closing conditions.  The company will issue all of the shares of common stock under its currently effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the "SEC").  

This press release does not constitute an offer to sell or the solicitation of an offer to buy any shares of the Company's common stock, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of a prospectus and a related prospectus supplement, which have been filed or will be filed with the SEC.  When available, the final prospectus supplement and accompanying base prospectus may be obtained;

• from J.P. Morgan Securities Inc., Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by calling (866) 803-9204;
• from Deutsche Bank Securities Inc., Attention: Prospectus Department, 100 Plaza One, Jersey City, NJ 07311 or by calling (800) 503-4611 or by e-mail to [email protected];
• from BofA Merrill Lynch, Attn: Preliminary Prospectus Department, 4 World Financial Center, New York, NY 10080 or by e-mail to [email protected];
• from Citigroup Global Markets Inc., Attn: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220 or by calling (877) 858-5407;
• from Raymond James & Associates, Inc., 880 Carillon Parkway, St. Petersburg, FL 33716, or by calling (800) 248-8863; or
• by visiting the EDGAR database on the SEC's web site at www.sec.gov.

About the Company

Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) which owns and provides value-enhancing asset management of high-end hotels and resorts in the United States, Mexico and Europe. The company currently has ownership interests in 17 properties with an aggregate of 8,002 rooms.

This press release contains forward-looking statements about the Company. Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties. Actual results could differ materially from the Company's projections. Factors that may contribute to these differences include, but are not limited to the following: the Company's ability to consummate the tender offer for the Exchangeable Notes; the Company's ability to consummate the Offering of shares of the common stock of the Company; demand for hotel rooms in our current and proposed market areas; availability of capital; ability to obtain or refinance debt or comply with covenants contained in our debt facilities; rising interest rates and operating costs; rising insurance premiums; cash available for capital expenditures; competition; economic conditions generally and in the real estate market specifically, including further deterioration of the current global economic downturn and the extent of its effect on business and leisure travel and the lodging industry; ability to dispose of existing properties in a manner consistent with our disposition strategy; delays and cost overruns in construction and development; demand for hotel condominiums; marketing challenges associated with entering new lines of business; risks related to natural disasters; the effect of threats of terrorism and increased security precautions on travel patterns and hotel bookings; the outbreak of hostilities and international political instability; legislative or regulatory changes, including changes to laws governing the taxation of REITs; and changes in generally accepted accounting principles, policies and guidelines applicable to REITs.

Additional risks are discussed in the Company's filings with the Securities and Exchange Commission, including those appearing in Exhibit 99.1 to the Company's Quarterly Report on Form 10-Q filed with the SEC on May 6, 2010 and subsequent reports the Company files with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SOURCE Strategic Hotels & Resorts, Inc.

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