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WHITE PLAINS, N.Y. -- On or about October 30, 2004, CMG Partners, LLC ("CMG") commenced an unsolicited tender offer to purchase up to 4.9% of the outstanding limited partnership units of Westin Hotels Limited Partnership ("WHLP") at a purchase price of $600 per unit, reduced by the amount of any cash distributions made on or after June 1, 2004.
The Board of Directors of Westin Realty Corp. (the "General Partner"), the general partner of WHLP, evaluated the terms of the offer and recommends that limited partners should reject CMG's offer. The General Partner believes that the price and terms of the offer are inadequate for the following reasons:
(i) As previously announced, on October 18, 2004, The Westin Chicago Limited Partnership, a Delaware limited partnership and subsidiary of WHLP ("WCLP"), and JER Partners Acquisitions III, LLC ("JER Acquisitions") entered into a Purchase and Sale Agreement pursuant to which, among other things, WCLP will sell the Westin Michigan Avenue hotel to JER Acquisitions for $137 million in cash, subject to certain purchase price adjustments. After consummation of the proposed sale, the General Partner estimates that proceeds ultimately available for distribution to limited partners will be approximately $120 million in the aggregate or $885 per unit, assuming the proposed sale had been completed on June 30, 2004. The General Partner expects that a substantial portion of the sale proceeds will be distributed to limited partners promptly after the closing of the sale of the Westin Michigan Avenue hotel. Limited partners should be aware that the proposed sale of the Westin Michigan Avenue hotel is subject to several closing conditions, including the written consent of limited partners holding a majority of the outstanding limited partnership units to authorize the General Partner's grant of consent to the proposed sale on behalf of WHLP. At this time, the General Partner is not able to provide any assurances that the closing conditions will be satisfied.
(ii) Limited partners who tender their units to CMG will surrender their right to participate in any future benefits from ownership of the units, including any future cash distributions.
(iii) The General Partner has not verified that CMG has sufficient resources to consummate the offer. CMG has not provided financial information to allow limited partners to confirm CMG's financial position or its ability to consummate the offer.
(iv) The Agreement of Assignment and Transfer to tender the units provides that a tendering limited partner will transfer certain rights before being paid for the units.
(v) CMG's offer is considered irrevocable 10 days after a limited partner executes the Agreement of Assignment and Transfer.
(vi) CMG will probably not be able to purchase the units they are making offers for until 2005.
(vii) CMG's offer is subject to vague and ambiguous conditions.
Cautionary Information Regarding Forward-Looking Statement
Certain statements contained in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements regarding the intent, belief or current expectations of WHLP or WCLP or their respective general partners and their officers or directors with respect to the matters discussed in this release. All such forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the forward-looking statements, including, without limitation, the risks and uncertainties associated with the following: (a) the ability to obtain limited partner consent to the sale of the Westin Michigan Avenue hotel to JER Acquisitions and the satisfaction of the other closing conditions; (b) a delay in the closing of the sale of the hotel; (c) the amount of any purchase price adjustments required by the definitive agreement; (d) the timing and amount of the distribution proceeds to limited partners after the closing of the sale of the hotel and the amount of proceeds that will be available for distribution to limited partners; and (e) the other risks and uncertainties described in WHLP's public filings with the Securities and Exchange Commission (the "SEC"). WHLP undertakes no obligation to publicly update or revise any forward-looking statement to reflect current or future events.
More information regarding the proposed sale of the hotel and further discussion of the definitive agreement is contained in WHLP's Consent Solicitation Statement on Schedule 14A which was filed as a preliminary proxy statement with the SEC on October 25, 2004 and is available free of charge on the SEC's website at www.sec.gov. For further information, please contact Nancy DeMarino at Phoenix American Financial Services, Inc., WHLP's investor relations manager, at 800-323-5888.
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