Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announced today a definitive agreement to sell the Desert Inn Hotel and Casino in an all cash deal for approximately $270 million to Stephen A. and Elaine Wynn.
The transaction is not subject to any due diligence, financing or licensing conditions. The sale agreement includes the receipt of a $30 million nonrefundable deposit. The transaction is expected to close no later than June 30 of 2000. The actual proceeds to the company will exceed the purchase price due to certain adjustments related to the prior agreement for the sale of the asset to Sun International. Starwood will not incur any capital gains tax on the sale. Proceeds of the sale will be used to pay down debt and to repurchase stock under the company`s existing share repurchase authorization plan.
The agreement with Mr. and Mrs. Wynn also includes a right of first refusal in favor of Starwood for future development of timeshare at the asset.
“Though we received several attractive offers for the Desert Inn, the speed and certainty of this transaction made it the most attractive to shareholders,” said Barry S. Sternlicht, chairman and chief executive officer of Starwood Hotels & Resorts. “The sale completes our exit from gaming and further strengthens our balance sheet. Net of cash and certain accounts receivable acquired in the Vistana timeshare acquisition, our debt will have been reduced from more than $9 billion in the third quarter of 1999 to approximately $ 5.2 billion as of June 30. Given this and the current strength of our operations, we are very optimistic we will achieve an investment grade rating this year.”
Starwood Hotels & Resorts Worldwide, Inc., through its St. Regis, Luxury Collection, Westin, Sheraton, Four Points and W brands, is one of the leading hotel and leisure companies in the world with more than 700 hotels in 80 countries and 120,000 employees at its owned and managed properties. SOURCE Starwood Hotels & Resorts Worldwide, Inc.