Starwood Finally Moving Ahead With Le Meridien
Apr 28, 2005, 5:53 am
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Starwood Finally Moving Ahead With Le Meridien
Starwood and Lehman to acquire Le Meridien hotels
Thu Apr 28, 2005 06:48 AM ET
(Recasts lead with acquisition, adds details, revenue, outlook, analysts estimates)
NEW YORK, April 28 (Reuters) - Starwood Hotels & Resorts Worldwide Inc. (HOT.N: Quote, Profile, Research) , which owns the Sheraton, W and Westin hotel brands, on Thursday said it would acquire the hotel portfolio of Le Meridien group in a joint venture with Lehman Brothers.
Starwood Hotels said it would also acquire the Le Meridien brand and would manage the 36 owned and leased Le Meridien properties to be acquired by the joint venture of Lehman and Starwood Capital Group.
Terms of the deal were not disclosed.
Starwood also reported its first-quarter profit more than doubled as a strengthening travel industry boosted room rates and occupancy.
Net income from continuing operations rose to $79 million, or 36 cents a share, from $34 million, or 16 cents a share, a year earlier.
Excluding one-time items, Starwood earned 35 cents a share, above the average Wall Street estimate of 31 cents a share, according to Reuters Estimates.
First-quarter revenue rose 14.6 percent to $1.4 billion. Analysts expected $1.28 billion.
Revenue per available room, a key measure of health in the lodging industry, rose 8 percent at North American hotels open at least a year.
Looking ahead, Starwood said it expects second-quarter earnings of 64 cents a share, ahead of the average analysts' estimate of 60 cents a share.
Starwood expects a revenue per room to increase by about 10 to 12 percent at North American owned hotels open at least a year in the second quarter, and 9 percent to 11 percent for the full year.
For the full year, White Plains, New York-based Starwood expects revenue of $5.95 billion, on earnings of $2.09 a share.
Analysts expect revenue of $5.66 billion on earnings of $2.04 a share.
Starwood said the acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien.
Thu Apr 28, 2005 06:48 AM ET
(Recasts lead with acquisition, adds details, revenue, outlook, analysts estimates)
NEW YORK, April 28 (Reuters) - Starwood Hotels & Resorts Worldwide Inc. (HOT.N: Quote, Profile, Research) , which owns the Sheraton, W and Westin hotel brands, on Thursday said it would acquire the hotel portfolio of Le Meridien group in a joint venture with Lehman Brothers.
Starwood Hotels said it would also acquire the Le Meridien brand and would manage the 36 owned and leased Le Meridien properties to be acquired by the joint venture of Lehman and Starwood Capital Group.
Terms of the deal were not disclosed.
Starwood also reported its first-quarter profit more than doubled as a strengthening travel industry boosted room rates and occupancy.
Net income from continuing operations rose to $79 million, or 36 cents a share, from $34 million, or 16 cents a share, a year earlier.
Excluding one-time items, Starwood earned 35 cents a share, above the average Wall Street estimate of 31 cents a share, according to Reuters Estimates.
First-quarter revenue rose 14.6 percent to $1.4 billion. Analysts expected $1.28 billion.
Revenue per available room, a key measure of health in the lodging industry, rose 8 percent at North American hotels open at least a year.
Looking ahead, Starwood said it expects second-quarter earnings of 64 cents a share, ahead of the average analysts' estimate of 60 cents a share.
Starwood expects a revenue per room to increase by about 10 to 12 percent at North American owned hotels open at least a year in the second quarter, and 9 percent to 11 percent for the full year.
For the full year, White Plains, New York-based Starwood expects revenue of $5.95 billion, on earnings of $2.09 a share.
Analysts expect revenue of $5.66 billion on earnings of $2.04 a share.
Starwood said the acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien.
Apr 28, 2005, 7:20 am
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Here's what I found on Hospitality.net:
Starwood Hotels, Lehman Brothers and Starwood Capital Sign Agreements to Make Acquisition Proposals for Le Meridien
Starwood Hotels to Acquire Brand Business | Lehman Brothers and Starwood Capital to Form Joint Venture to Acquire Real Estate
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--April 28, 2005--Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT - News), today announced that:
Affiliates of Lehman Brothers and Starwood Capital Group Global LLC have entered into a non-binding letter of intent to form a joint venture which would propose to acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman Brothers); and
Starwood Hotels has entered into a non-binding agreement with the Lehman Brothers/Starwood Capital joint venture whereby Starwood Hotels would propose to acquire the Le Meridien brand and related management and franchise business from Le Meridien. Starwood Hotels would also enter into management agreements for the 36 owned and leased Le Meridien property portfolio to be acquired by Lehman Brothers and SCG with such hotels continuing to be operated under their current flags.
The brand and hotel portfolio acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien. The transaction is subject to the execution of definitive agreements, the approval by the boards or internal committees, as applicable, of Starwood Hotels, Lehman Brothers, Starwood Capital and Le Meridien, regulatory approvals, consultation where appropriate with employee representatives and other customary terms and conditions. Other terms of the agreements were not disclosed.
Press release is confusing because in one part they state "acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman Brothers)" yet in the other part they talk about 36 hotels. So are we only getting 36 owned and leases properties or the entire portfolio as part of *W? Anyone have any insight into what 36 properties LeMeridien actually owns or leases vs. which are under management contracts?
Starwood Hotels, Lehman Brothers and Starwood Capital Sign Agreements to Make Acquisition Proposals for Le Meridien
Starwood Hotels to Acquire Brand Business | Lehman Brothers and Starwood Capital to Form Joint Venture to Acquire Real Estate
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--April 28, 2005--Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT - News), today announced that:
Affiliates of Lehman Brothers and Starwood Capital Group Global LLC have entered into a non-binding letter of intent to form a joint venture which would propose to acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman Brothers); and
Starwood Hotels has entered into a non-binding agreement with the Lehman Brothers/Starwood Capital joint venture whereby Starwood Hotels would propose to acquire the Le Meridien brand and related management and franchise business from Le Meridien. Starwood Hotels would also enter into management agreements for the 36 owned and leased Le Meridien property portfolio to be acquired by Lehman Brothers and SCG with such hotels continuing to be operated under their current flags.
The brand and hotel portfolio acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien. The transaction is subject to the execution of definitive agreements, the approval by the boards or internal committees, as applicable, of Starwood Hotels, Lehman Brothers, Starwood Capital and Le Meridien, regulatory approvals, consultation where appropriate with employee representatives and other customary terms and conditions. Other terms of the agreements were not disclosed.
Press release is confusing because in one part they state "acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman Brothers)" yet in the other part they talk about 36 hotels. So are we only getting 36 owned and leases properties or the entire portfolio as part of *W? Anyone have any insight into what 36 properties LeMeridien actually owns or leases vs. which are under management contracts?
Last edited by christianj; Apr 28, 2005 at 7:27 am
Apr 28, 2005, 9:41 am
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Since this is the earlier thread, I will treat it as the right one to post in.
HOT dropped quite a bit in before-the-bell trading, and I can't figure out why. Is the Lehman deal considered a reach by investors?
Any opinions on the financials of the deal by long-time starwood watchers here? Or is discussion of company financials against FT T&Cs?
HOT dropped quite a bit in before-the-bell trading, and I can't figure out why. Is the Lehman deal considered a reach by investors?
Any opinions on the financials of the deal by long-time starwood watchers here? Or is discussion of company financials against FT T&Cs?
Apr 28, 2005, 9:51 am
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Posted on LeMeridien Web Site
Proposals for Recapitalisation of Le Meridien Hotels Group
April 28, 2005
Le Meridien Hotels & Resorts ("the Group") today announces that:
Affiliates of Lehman Brothers, the holder of much of the Group's debt, and Starwood Capital Group Global LLC have advised the Group that they have entered into a non-binding letter of intent to form a joint venture and have proposed that the joint venture acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman); and
The Group has been advised that Starwood Hotels & Resorts Worldwide, Inc. has entered into a non-binding agreement with the Lehman/Starwood Capital joint venture and pursuant to that agreement Starwood Hotels has proposed to acquire the Le Meridien brand, management and franchise business from Le Meridien. Starwood Hotels would also enter into management agreements for the 36 owned and leased Le Meridien properties to be acquired by Lehman and Starwood Capital Group with such hotels continuing to be operated under their current flags.
These proposals will be presented to the Board of Le Meridien as part of a recapitalisation plan for the Group. Consummation of the transactions contemplated by these proposals would be subject to the execution of definitive agreements, regulatory approvals, confirmatory due diligence, consultation where appropriate with employee representatives, the agreement of other Le Meridien stakeholders and Board of Directors and other customary terms and conditions. Other terms of the proposals were not disclosed.
Robert Riley, CEO of Le Meridien commented: "If completed, these arrangements would at long last provide for the consensual recapitalisation of the Group. Le Meridien has a well-respected and unique identity with strong customer loyalty, and skilled, experienced and passionate employees. Its alignment with a robust multi-branded management company like Starwood Hotels should enable the Le Meridien brand and its hotels to thrive by enhancing revenue and accelerating growth. The joint venture with Lehman Brothers and Starwood Capital Group should provide a financially strong structure for the current owned and leased portfolio. Providing an independent ownership structure for the Forte Village should create new potential for this world famous property."
The transactions and recapitalisation are anticipated to be completed in the third quarter of 2005. In the meantime, Le Meridien Hotels & Resorts will continue to be operated independently by current management.
THE HIGHLIGHTED TEXT INDICATES THAT LE MERIDIEN HOTELS WILL BE MANAGED BY STARWOOD AND HOPEFULLY WILL BE LOCATIONS WHERE STARPOINTS CAN BE ACCURED AND AWARDS AVAILABLE. ^
April 28, 2005
Le Meridien Hotels & Resorts ("the Group") today announces that:
Affiliates of Lehman Brothers, the holder of much of the Group's debt, and Starwood Capital Group Global LLC have advised the Group that they have entered into a non-binding letter of intent to form a joint venture and have proposed that the joint venture acquire the owned and leased hotel portfolio of Le Meridien (with the exception of the Forte Village in Sardinia which would be acquired by an affiliate of Lehman); and
The Group has been advised that Starwood Hotels & Resorts Worldwide, Inc. has entered into a non-binding agreement with the Lehman/Starwood Capital joint venture and pursuant to that agreement Starwood Hotels has proposed to acquire the Le Meridien brand, management and franchise business from Le Meridien. Starwood Hotels would also enter into management agreements for the 36 owned and leased Le Meridien properties to be acquired by Lehman and Starwood Capital Group with such hotels continuing to be operated under their current flags.
These proposals will be presented to the Board of Le Meridien as part of a recapitalisation plan for the Group. Consummation of the transactions contemplated by these proposals would be subject to the execution of definitive agreements, regulatory approvals, confirmatory due diligence, consultation where appropriate with employee representatives, the agreement of other Le Meridien stakeholders and Board of Directors and other customary terms and conditions. Other terms of the proposals were not disclosed.
Robert Riley, CEO of Le Meridien commented: "If completed, these arrangements would at long last provide for the consensual recapitalisation of the Group. Le Meridien has a well-respected and unique identity with strong customer loyalty, and skilled, experienced and passionate employees. Its alignment with a robust multi-branded management company like Starwood Hotels should enable the Le Meridien brand and its hotels to thrive by enhancing revenue and accelerating growth. The joint venture with Lehman Brothers and Starwood Capital Group should provide a financially strong structure for the current owned and leased portfolio. Providing an independent ownership structure for the Forte Village should create new potential for this world famous property."
The transactions and recapitalisation are anticipated to be completed in the third quarter of 2005. In the meantime, Le Meridien Hotels & Resorts will continue to be operated independently by current management.
THE HIGHLIGHTED TEXT INDICATES THAT LE MERIDIEN HOTELS WILL BE MANAGED BY STARWOOD AND HOPEFULLY WILL BE LOCATIONS WHERE STARPOINTS CAN BE ACCURED AND AWARDS AVAILABLE. ^
Apr 28, 2005, 10:17 am
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Originally Posted by ordfreqflyer
THE HIGHLIGHTED TEXT INDICATES THAT LE MERIDIEN HOTELS WILL BE MANAGED BY STARWOOD AND HOPEFULLY WILL BE LOCATIONS WHERE STARPOINTS CAN BE ACCURED AND AWARDS AVAILABLE. ^
And platinum upgrades and stay/night credits obtained. I'm dying to go to Monte Carlo for free!
Apr 28, 2005, 11:32 am
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Does this mean the Le Parker Meridien in NYC will be included? I hope so as we are losing the Essex house soon and I could use another *wood hotel that is allowable by our corp. system.
Apr 28, 2005, 11:43 am
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Originally Posted by Score8
Does this mean the Le Parker Meridien in NYC will be included? I hope so as we are losing the Essex house soon and I could use another *wood hotel that is allowable by our corp. system.
NEW YORK (Reuters) - Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT - News) on Thursday said it has agreed to buy the management unit of Le Meridien and form a joint venture in which Starwood Capital Group and Lehman Brothers would acquire all the hotels owned by the European upscale hotel chain.
Starwood Hotels would buy the Le Meridien brand and would manage all 135 Meridien properties.
Starwood Capital and Lehman Brothers would buy the 36 owned and leased Le Meridien properties, and Lehman alone will buy one more hotel.
"We see this as a positive for Starwood stock as it increases its fee business by a good level," Bear Stearns analyst Joe Greff said, estimating a 6 percent increase in the hotel chain's management fees.
Still, Starwood shares fell 53 cents in Thursday pre-market trade, from their Wednesday close of $57.46 on the New York Stock Exchange.
Le Meridien Chief Executive Robert Riley said he expects the deal to close in the third quarter. "This is a very good deal for us," he said in an interview with Reuters. "We defaulted on our debt, and this enables us to recapitalize all of our debt."
Separately, the hotel chain said first-quarter profit more than doubled as a strengthening travel industry boosted room rates and occupancy.
Net income from continuing operations rose to $79 million, or 36 cents a share, from $34 million, or 16 cents a share, a year earlier.
The acquisition proposals will be presented to the Le Meridien board as part of an overall restructuring plan for Le Meridien, Starwood said.
Other terms of the deal were not disclosed.
Riley said the company is yet to decide on the impact of the deal on its 500 employees. "We will determine to what extent and how that's impacted. We're now studying the implications. Some jobs will be transferred to Starwood and some to the joint venture, and some will be rationalized."
Excluding one-time items, Starwood earned 35 cents a share, above the average Wall Street estimate of 31 cents a share, according to Reuters Estimates.
First-quarter total revenue rose 14.6 percent to $1.4 billion. Analysts expected $1.28 billion.
Revenue per available room, a key measure of health in the lodging industry also knows as revpar, rose 8 percent at North American hotels open at least a year.
"Demand for our brands is strong and supply remains constrained, which means that we continue to have above average pricing power," Starwood Chief Executive Steven Heyer said in a statement.
"We clearly expect this to continue for the balance of 2005 and into 2006."
Starwood said it expects second-quarter earnings of 64 cents a share, ahead of the average analysts' estimate of 60 cents a share.
Starwood expects an increase of about 10 to 12 percent at North American owned hotels open at least a year in the second quarter and 9 to 11 percent for the full year.
For the full year, White Plains, New York-based Starwood expects revenue of $5.95 billion, on earnings of $2.09 a share.
Analysts expect revenue of $5.66 billion on earnings of $2.04 a share.
Apr 28, 2005, 11:43 am
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Originally Posted by Score8
Does this mean the Le Parker Meridien in NYC will be included? I hope so as we are losing the Essex house soon and I could use another *wood hotel that is allowable by our corp. system.
Last edited by christianj; Apr 28, 2005 at 11:53 am
Apr 28, 2005, 12:11 pm
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This is excellent news.
Lurker, Some clarification would be much appreciated here.
Cheers
Lurker, Some clarification would be much appreciated here.
Cheers
Apr 28, 2005, 1:00 pm
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I'm not that familiar with LM. Where do they have properties that SW does not?
I know they have one on the S. Pacific Island of Vanuatu.
I know they have one on the S. Pacific Island of Vanuatu.
Apr 28, 2005, 1:04 pm
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Originally Posted by jonnye
Lurker, Some clarification would be much appreciated here.
Apr 28, 2005, 1:50 pm
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Originally Posted by LemonThrower
I'm not that familiar with LM. Where do they have properties that SW does not?
I know they have one on the S. Pacific Island of Vanuatu.
I know they have one on the S. Pacific Island of Vanuatu.
In N. America they have Minneapolis, Sunny Isles Florida near Miami and Cancun. (Yes there are two *W in Cancun but the LeMeridien gets great reviews and is always listed in the best hotels in Mexico ratings)
There are also a large number of hotels in the Pacific, Middle East and also in Africa. Two properties in French Polynesia (Bora Bora and Tahiti) with Over the Water Bungalows and also the Seychelles!!
Complete list at:
http://www.lemeridien.com/hotels/index.shtml
Last edited by christianj; Apr 28, 2005 at 1:58 pm
Apr 28, 2005, 3:20 pm
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They have a property immediately on the water in the French town of Juan les Pin, about 10 miles east of Cannes. The hotel is simple, but the location is terrific.
Apr 28, 2005, 3:43 pm
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A really, really bad LM hotel is the Pegasus in Georgetown, Guyana. Still, it's nice to have a chance to earn Starpoints if you have to stay there...
Apr 28, 2005, 8:50 pm
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Finally a location in Barcelona for Starwood... W not set to open for a couple of years but the Meridien has a great location on the Ramblas..