Corp. announced today that it had signed a definitive agreement to be
acquired by affiliates of The Blackstone Group for $12.25 per share, a 42%
premium to the closing price on August 18th. The total value of the
transaction, including debt, is over $790 million. Prime Hospitality Corp.
(Prime) controls three hotel brands—AmeriSuites, Wellesley Inns &
Suites and Prime Hotels and Resorts—operating and franchising 256
hotels with 33,605 rooms. Of these hotels, it owns 112 comprising 14,183
The Board of Directors of Prime approved the agreement in a special
meeting today. The transaction is subject to shareholder approval and
other customary conditions and is expected to be completed during the
fourth quarter of 2004.
Blackstone plans to maintain the headquarters operations of Prime
Hospitality Corp. in Fairfield, NJ. In addition, Blackstone intends to
convert 37 of the owned Wellesley Inns & Suites, which were originally
built as moderate price extended stay hotels with kitchens, to one of its
Extended Stay America brands.
In making the announcement, Attilio Petrocelli, Chairman and Chief
Executive Officer of Prime, commented, “The Board of Directors is pleased
with the terms of this acquisition and believes it is in the best
interests of the Company’s shareholders. The Board is especially grateful
to the excellent team of associates in this organization.”
Jonathan D. Gray, Senior Managing Director of The Blackstone Group, said,
“We are excited to be acquiring Prime Hospitality. Prime has an
outstanding collection of properties, brands and people. We look forward
to working with the organization, its franchisees and owner/partners.”
A special shareholder meeting will be announced soon to obtain shareholder
In connection with the transaction, Prime will commence a tender offer and
consent solicitation relating to its 8.375% Senior Subordinated Notes due
2012 ($178.7 million principal amount outstanding). Details with respect
to this tender offer and consent solicitation will be set forth in tender
offer documents, which will be furnished in due course to holders of the
The Company will host a conference call to discuss the transaction, which
will be held on August 19, 2004 at 10:00 a.m. The dial-in number is (800)
Bear, Stearns & Co. Inc. is serving as financial advisor to Prime and Banc
of America Securities LLC is serving as financial advisor for Blackstone.
Bank of America’s CMBS Capital Markets Group is providing acquisition
financing for the transaction. Olshan Grundman Frome Rosenzweig & Wolosky
LLP and Simpson Thacher & Bartlett LLP acted as legal advisers to Prime
and Blackstone, respectively.