Starwood Responds to Misleading Statements

Starwood Hotels & Resorts Worldwide, Inc. today responded to misleading statements made by Kalmia Investors, LLC, a holder of units of limited partnership interest in the partnership that owns the Westin Michigan Avenue Hotel in Chicago. Starwood also stated that it questioned certain statements made last week by Kalmia that appear inconsistent with statements made by Kalmia in connection with its recently expired tender offer.
Starwood stated that it believes that Kalmia’s statements are a transparent attempt to disrupt Starwood’s own tender offer for the partnership’s units at a purchase price of $735 per unit in cash, which is $10 more per unit than the price in Kalmia’s recently expired tender offer. Starwood is also soliciting consents to proposals that would expedite the transfer of units in Starwood’s offer and Starwood’s ability to promptly effect a back-end merger.

Starwood encourages unitholders not to be swayed by Kalmia’s misleading statements and to tender their units and consent to the proposals promptly. Starwood’s offer and consent solicitation are scheduled to expire at 5:00 p.m., Eastern time, on Friday, February 20, 2004 (the “Expiration Date”), and Starwood does not intend to further extend the offer period or increase its offer price.

Starwood noted that on February 13, 2004 Kalmia filed with the SEC and apparently mailed to unitholders a letter in which Kalmia referred to “obvious conflicts of interest” between Starwood and the general partner of the partnership and Kalmia’s “belief that the present General Partner is breaching its fiduciary duty to the Unitholders by failing to maximize the Unitholders’ value.” Starwood stated that it believes these statements by Kalmia are self-serving and misleading.

As Starwood and the partnership have repeatedly disclosed in SEC filings and as Starwood has made clear in letters to unitholders, Starwood and the partnership have taken a number of steps to minimize or eliminate any conflict of interest between Starwood and the partnership’s general partner in connection with Starwood’s tender offer and consent solicitation and competing transactions. Although the general partner is a wholly owned subsidiary of Starwood, Starwood believes that the actions of the general partner in connection with the tender offers by Starwood, Kalmia and other parties demonstrate the independence of the general partner in connection with these matters.