In the merger, each share of company common stock will be converted into the right to receive $15.00 in cash, regardless of any fees payable in connection with Winston Hotels' previously terminated merger agreement. Pursuant to the terms of the agreement and plan of merger with Inland American, dividends will not be paid on the common stock. In addition, each share of company Series B preferred stock will be converted into the right to receive $25.44 per share (or $25.38 per share if the effective time of the merger occurs after June 30, 2007, and on or prior to September 30, 2007) in cash, plus any accrued and unpaid dividends as of the effective time of the merger. Inland American intends to fund the merger consideration with cash on hand, and the completion of the merger is not subject to any financing or refinancing contingency.
The company's board of directors, upon the recommendation of a special committee of its independent directors, unanimously approved the merger agreement and will recommend approval of the merger by the company's common stockholders. The common stockholders will be asked to vote on the proposed transaction at a special meeting that will be held on a date to be announced. The merger is expected to close in the third quarter of 2007, subject to receipt of stockholder approval and other customary closing conditions. Upon the closing of the transaction, Winston Hotels will have no publicly traded securities.
The company does not expect the merger to affect the employees managing and overseeing the day-to-day operations of the company's hotels.
'The Board of Directors and the special committee of outside directors are pleased that the sale process has been structured in a manner that they believe provides the opportunity for the greatest benefit to our shareholders,' said Robert W. Winston III, chief executive officer. Joseph V. Green, president and chief financial officer, added, 'The increased purchase price per share of common stock validates the momentum that we believe not only is behind our portfolio but also all of our growth strategies.'
Lehman Brothers Inc. acted as exclusive financial advisor and Wyrick Robbins Yates & Ponton LLP acted as counsel to the special committee of the company's board of directors. JF Capital Advisors LLC acted as financial advisor and Hunton & Williams LLP acted as counsel to the company. Raymond James acted as exclusive financial advisor and DLA Piper US LLP and Shefsky & Froelich Ltd. acted as counsel to the buyer.