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|Hilton Signs Letter of Intent to Sell Red Lion Chain and Selected Doubletree Locations to WestCoast Hospitality|
BEVERLY HILLS, Calif. & SPOKANE, Wash.--(BUSINESS WIRE)--Oct. 18, 2001--Hilton Hotels Corp. (NYSE:HLT) and WestCoast Hospitality Corp. (NYSE:WEH) today entered into a non-binding letter of intent whereby Hilton will sell to WestCoast Hospitality its Red Lion chain of hotels and five Doubletree hotels.
The companies are making this announcement because they will be disclosing the proposed transaction in connection with pursuing potential franchises.
The transaction, which is subject to negotiation of a definitive agreement and the successful completion of due diligence, is expected to close by year-end 2001. Financial terms of the transaction will be announced upon closing.
Included in the transaction are 42 Red Lion hotels with 6,426 rooms. The hotels, located primarily in the western United States, are in the states of Washington, Oregon, California, Montana, Colorado, Idaho, Arizona, Nevada, Wyoming, Missouri, Nebraska and Minnesota. Of the 42 properties, eight are owned by Hilton and 11 are leased. One hotel is operated by Red Lion under a management agreement, and the remaining 22 are franchise agreements. Hilton had acquired the Red Lion brand as part of its November 1999 acquisition of Promus Hotel Corp.
Also part of the transaction are five Doubletree hotels (all of which had been branded previously as Red Lions), located in Pasco, Wash. (278 rooms); Portland/Columbia River, Ore. (301 rooms); Jantzen Beach, Ore. (320 rooms); Boise, Idaho (162 rooms); and Missoula, Mont. (171 rooms). Hilton owns the properties in Washington and Oregon, leases the hotel in Idaho and has a 50 percent equity position in the Montana property, the sale of which is subject to a joint venture agreement.
Red Lion Hotels, Inns and Inns & Suites are well known and respected for serving the needs of business and leisure travelers with a strong focus on the senior market and family vacationers. Founded in 1959, Red Lion earned a reputation as the hotel brand of choice in the Northwest and western United States. In 1996, Red Lion was sold to Doubletree, and became part of Promus when those two companies merged in 1997.
Hilton Hotels Corp. is recognized internationally as a preeminent hospitality company. The company develops, owns, manages or franchises approximately 2,000 hotels, resorts and vacation ownership properties. Its portfolio includes many of the world's best known and most highly regarded hotel brands, including Hilton(R), Conrad(TM), Doubletree(R), Embassy Suites Hotels(R), Hampton Inn(R), Hampton Inn & Suites(R), Harrison Conference Centers(R), Hilton Garden Inn(R), Hilton Grand Vacations Co.(R), Homewood Suites(R) by Hilton, and Red Lion Hotels & Inns(R).
Red Lion franchisees and customers are expected to benefit from the management and marketing depth that Washington-based WestCoast Hospitality Corp. has in the primary, secondary and tertiary markets of the western United States.
The acquisition will approximately double the number of rooms owned, leased, managed or franchised by WestCoast Hospitality Corp. from 8,600 rooms in 46 hotels located in nine states to more than 16,000 rooms in 93 hotels located in 15 states, and will expand WestCoast into key markets including San Diego and Sacramento, Calif.; Colorado Springs and Denver, Colo.; St. Paul, Minn.; Omaha, Neb.; Missoula, Mont.; and Springfield, Mo.
Lehman Brothers Inc. is acting as financial advisor to WestCoast in this transaction.
This release and any supplemental information contains forward- looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including those concerning the future products and activities of the companies discussed in this release. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, risks relating to the operation of hotels, the availability of capital to finance growth, disruptions in service due to construction, the historical cyclicality of the lodging industry, the integration of acquisitions, as well as other matters discussed under the headings "business" and "risk factors" in the filings by the parties with the Securities and Exchange Commission. All brand names referred to in this release are protected under registrations by the parties referred to in this release.