PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b)(3)
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(To Prospectus dated November 20, 1997 and
Prospectus Supplement dated July 10, 1998)
2,172,370 Shares
MERISTAR HOSPITALITY CORPORATION
Common Stock
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MeriStar Hospitality Corporation (the "Company") is a self-administered
real estate investment trust (a "REIT") that owns a geographically diverse
portfolio of primarily full-service hotels. On August 3, 1998, the Company
completed the merger (the "Merger") of CapStar Hotel Company ("CapStar") with
and into the Company pursuant to which the Company changed its name from
American General Hospitality Corporation to MeriStar Hospitality Corporation. In
connection with the Merger, CapStar spun-off its hotel operations and management
business to its current stockholders as a new C-corporation called MeriStar
Hotel & Resorts, Inc. ("Resorts") and immediately following the Merger, Resorts
acquired 100% of the partnership interests in the third-party lessee that leased
most of the hotels owned by the Company prior to the Merger and substantially
all of the assets and certain liabilities of the third-party manager that
managed most of the hotels owned by the Company prior to the Merger.
The Company leases substantially all of its hotels to Resorts pursuant
to separate participating leases (the "Participating Leases") that are designed
to allow the Company to achieve substantial participation in any future growth
of revenues generated at its hotels. The Company and Resorts have entered into
an agreement (the "Intercompany Agreement"), pursuant to which, among other
things, (a) the Company agrees under certain circumstances to offer to Resorts
an opportunity to become the lessee of hotel properties acquired by the Company
in the future (under mutually satisfactory lease terms) and (b) Resorts agrees
not to make any real estate investments that may be structured in a manner that
qualifies under federal income tax requirements applicable to REITs unless it
first offers the Company the opportunity to make such investment and the Company
has rejected the opportunity.
The shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"), offered hereby are being offered on the account of certain
security holders of the Company. See "Registering Stockholders" and "The Company
- -- Securities to be Offered" in the accompanying Prospectus. The Company will
not receive any proceeds from the sale of any shares of Common Stock under
federal and state securities laws.
See "Risk Factors" beginning on page S-4 for certain factors relevant to
an investment in the Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
October 1, 1998
761671.3
