Starwood Hotels & Resorts (the Trust) and Starwood Hotels & Resorts Worldwide, Inc. (the Corporation), announced today that it had terminated the forward equity swap arrangement with affiliates of Merrill Lynch, Lehman Brothers and NationsBank by effectively reacquiring approximately 8 million paired shares (using the Company`s average stock price during the third quarter) for approximately $255 million. As a result, Starwood has no further obligation under any forward equity swaps.
As announced in August, the Board of Trustees and Board of Directors of Starwood approved, and financing commitments were received for a share repurchase program of up to $1 billion. At that time, the company said the repurchase program might also be used to redeem outstanding forward equity sales agreements. The Merrill Lynch, Lehman Brothers, NationsBank agreement was scheduled to expire in February 1999.
On September 22, Starwood announced the early termination of its only other forward equity swap with Union Bank of Switzerland (UBS) (2,185,000 original paired shares issued) for about $130 million.
``We believe Starwood stock continues to represent an extraordinary value,`` said Barry S. Sternlicht, chairman and chief executive of Starwood. ``The termination of this agreement will help to eliminate the overhang associated with these agreements, and any uncertainty created by the existence of these forward equity swaps,`` Mr. Sternlicht said.
Starwood Hotels & Resorts Worldwide, Inc. through its Sheraton, Westin and Caesars subsidiaries, is one of the leading hotel and gaming operating companies in the world. Starwood Hotels & Resorts is the largest real estate investment trust in the United States. Shares of Starwood Hotels & Resorts Worldwide, Inc. are paired and trade together with shares of Starwood Hotels & Resorts.