Equity Inns has entered into a definitive merger agreement under which an affiliate of Whitehall Street Global Real Estate Limited Partnership 2007 will acquire Equity Inns, Inc. in a transaction valued at approximately $2.2 billion, including debt.Under the terms of the agreement, Whitehall will acquire all of the outstanding common shares of Equity Inns, Inc. for $23.00 per share in cash. This represents a premium of approximately 28% over Equity Inns’ 90 day average closing share price and a premium of approximately 19% over Equity Inns’ closing price on June 20, 2007.
Equity Inns intends to pay its regular quarterly common share dividend for the quarter ending June 30, 2007, as previously announced on June 14, 2007 and under the terms of the merger agreement, Equity Inns is permitted to continue to pay regular quarterly dividends to shareholders of up to $0.25 per share, plus a prorated dividend for any partial quarter, prior to the closing of the transaction.
Howard A. Silver, Equity Inns’ President and Chief Executive Officer stated, “After careful and thorough analysis, our Board has endorsed this transaction with Whitehall as being in the best interests of the Company and our shareholders. The Board of Directors has unanimously adopted the agreement and the merger and recommends that Equity Inns’ shareholders approve the agreement and the merger. We are pleased that the offer provides compelling value and we look forward to working with Whitehall to quickly complete the transaction.”
Jonathan Langer, Managing Director of Goldman, Sachs’ Real Estate Principal Investment Area commented, “We are truly excited to add Equity Inns’ hotel assets to our real estate portfolio. Equity Inns’ strategy of aligning itself with the leading brands in the lodging industry has proven highly effective. The Company has demonstrated a solid ability to create value and has strategically positioned itself as a leader in its industry.”
The transaction is subject to certain closing conditions, including the approval of Equity Inns’ shareholders of the agreement and the merger and the satisfaction of other customary closing conditions. There is no financing condition to complete the transaction. The transaction is expected to close promptly following the satisfaction of all closing conditions, which is anticipated to occur in the fourth quarter of 2007.
Pursuant to the terms of the merger agreement, each holder of units of limited partnership interest in the Company’s operating partnership will receive $23.00 per unit in cash and the Company’s Series B and Series C Preferred stock will be converted into shares of preferred stock of the acquiring entity which will have identical dividend and other relative rights, preferences, limitations and restrictions as are provided in the Company’s Series B and Series C Preferred stock.
Merrill Lynch & Co. is acting as the exclusive financial advisor to Equity Inns and Hunton & Williams LLP is the Company’s legal counsel. For Whitehall, Goldman, Sachs & Co. is the exclusive financial advisor and Sullivan & Cromwell LLP is serving as legal advisor.