Strategic Hotels & Resorts, Inc. Announces Public Offering of Common Stock
CHICAGO, May 10 /PRNewswire-FirstCall/ -- Strategic Hotels & Resorts, Inc. (the "Company") (NYSE: BEE) announced today that it plans to make a public offering of 40 million shares of its common stock (the "Offering"). The Company expects to grant the underwriters an option to purchase up to 6 million additional shares of common stock to cover over-allotments, if any. J.P. Morgan Securities Inc., Deutsche Bank Securities Inc. and BofA Merrill Lynch will act as joint book-running managers for the Offering, and Citigroup Global Markets Inc. will act as co-manager.
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 2012 of the Company's operating partnership, Strategic Hotel Funding, L.L.C. (the "Exchangeable Notes"), which was also announced today. The tender offer is conditioned on the Company's receipt of at least $200 million in gross proceeds from the Offering, among other conditions.
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 of the shares will be made under the Company's effective shelf registration statement filed with the Securities Exchange Commission (the "SEC"). The Company has filed a prospectus supplement with the SEC for the common stock offering to which this communication relates. When available, the prospectus supplement and accompanying base prospectus, meeting the requirements of Section 10 of the Securities Act of 1933, may be obtained from J.P. Morgan Securities Inc., Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or (866) 803-9204, from Deutsche Bank Securities Inc., Attention: Prospectus Department, 100 Plaza One, Jersey City, NJ 07311 or (800) 503-4611 or e-mail at [email protected], from BofA Merrill Lynch, Attn: Preliminary Prospectus Department, 4 World Financial Center, New York, NY 10080 or e-mail at [email protected], or from Citigroup Global Markets Inc., Attn: Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220 or (877) 858-5407, or by visiting the EDGAR database on the SEC's web site at www.sec.gov.
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 with the SEC.
In addition, the tender offer described herein will be made only pursuant to an Offer to Purchase, the related Letter of Transmittal, and other related materials that the Company intends to distribute to holders of the Exchangeable Notes and file with the SEC. Holders of the Exchangeable Notes and investors should read carefully the Offer to Purchase, the Letter of Transmittal and other related materials. Holders of Exchangeable Notes and investors will be able to obtain a free copy of the Tender Offer Statement on Schedule TO, the Offer to Purchase, the Letter of Transmittal, and other documents the Company has filed with the SEC at the SEC's website at www.sec.gov, from the Information Agent named in the tender offer documents, or from the Company.
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 under the heading "Item 1A. Risk Factors" in the Company's most recent Form 10-K and subsequent Form 10-Qs. 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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