WASHINGTON, D.C.)—June 26, 2003—MeriStar Hospitality Corporation (NYSE: MHX) announced today that it has priced an offering of $155 million principal amount of 9.5% convertible subordinated notes due 2010 (“convertible notes”) pursuant to its effective shelf registration statement filed under the Securities Act of 1933. MeriStar also has granted the underwriter an option to purchase an additional $15 million principal amount of the convertible notes.
These notes are convertible into MeriStar common stock at a conversion rate of 98.23 shares per $1,000 principal amount of the convertible notes (equal to a conversion price of $10.18 per share of MeriStar common stock), subject to adjustment in certain circumstances. This represents a conversion premium of approximately 100 percent over MeriStar`s closing stock price of $5.09 on June 25, 2003. MeriStar may not redeem the newly issued convertible notes.
MeriStar expects to use the net proceeds from the offering to repurchase or redeem substantially all of the outstanding 4.75% convertible subordinated notes due 2004. To the extent that the net proceeds are not fully utilized by the purchase or redemption of the 4.75% convertible subordinated notes due 2004, MeriStar expects to use the remaining net proceeds to repurchase other debt.
The closing of the sale of the convertible notes is currently expected to occur on July 1, 2003.
Copies of the prospectus and prospectus supplement related to this offering may be obtained from Lehman Brothers Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717, phone: 631-254-7106, fax: 631-254-7268, e-mail: [email protected].
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
Washington, D.C.-based MeriStar Hospitality Corporation owns 105 principally upscale, full-service hotels in major markets and resort locations with 27,269 rooms in 25 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Radisson and Doubletree. For more information about MeriStar Hospitality Corporation, visit the company`s Web site: www.meristar.com.
This press release contains forward-looking statements regarding MeriStar and its financing arrangements, including our expectations that this offering will be successfully completed in a manner consistent with the terms outlined above. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, satisfaction of customary closing conditions, as well as changes in the securities or financial markets or in general economic conditions, the availability of equity and debt financing and global political developments. Except as expressly required by law, MeriStar disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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