Wyndham International, Inc. (NYSE:PAH), whose shares are paired and trade with those of Patriot American Hospitality, Inc., today announced it has agreed to offer holders of its common shares as of a record date to be set later this year the right to purchase up to $300 million of convertible preferred stock upon completion of a previously announced proposed $1 billion equity investment.
The rights offering is subject to consummation of the $1 billion equity investment, which itself remains subject to shareholder approval, antitrust clearance and certain other conditions and consents.
Wyndham said it made the commitment to proceed with the rights offering in a Memorandum of Understanding that outlines an agreement in principle to settle a class action lawsuit contesting a proposed $1 billion equity investment from investors. The proceeds of the rights offering will be used to redeem up to $300 million of the investor group`s $1 billion equity investment. The commitment to proceed with the rights offering is subject, among other conditions, to consummation of the settlement outlined in the Memorandum of Understanding.
The investors include affiliates of Thomas H. Lee Equity Fund IV, L.P.; Apollo Real Estate Management III, L.P.; Apollo Management IV, L.P.; Beacon Capital Partners, L.P.; and Rosen Consulting Group.
In the proposed rights offering, Wyndham`s common stockholders will have the right to purchase on a pro rata basis up to $300 million stated amount Series A 9.75% convertible preferred stock, callable after six years, with an initial conversion price of $8.59 per share (subject to adjustments), representing the same economic terms as the investors` security, with no voting rights. The record date for the rights offering will be set after completion of the equity investment, which is currently expected by June 30, 1999. Pursuant to the Memorandum of Understanding, Patriot expects to initiate the rights offering approximately 60 days after completion of the equity investment. The rights will be detachable.