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EXHIBIT 99.1
Contact: Douglas H. Verner
Senior Vice President, General Counsel
Secretary
(301) 592-3890
Pamela M. Williams
Vice President, Assistant General Counsel
Assistant Secretary
(301) 592-3891
Sunburst Hospitality Announces Agreement to be Acquired by Shareholder Group
SILVER SPRING, MD (September 20, 2000) Sunburst Hospitality Corporation (NYSE:
SNB), a hotel ownership and management company, announced today that it has
entered into a definitive agreement to be acquired by a group of Sunburst's
existing shareholders and management including Stewart Bainum Jr., Chairman of
Sunburst's Board of Directors, James A. MacCutcheon, Chief Financial Officer,
other members of the management of Sunburst and other members of the Bainum
family. The transaction, which is structured as a recapitalization that
requires shareholder approval, provides for the acquisition of all outstanding
publicly held shares of common stock of Sunburst at a price of $7.375 per share
in cash.
The agreement was unanimously approved by Sunburst's Board of Directors
acting upon the unanimous recommendation of a Special Committee of the Board of
Directors, which is comprised of directors who are not affiliated with the group
of purchasing stockholders. Salomon Smith Barney served as the financial
advisor to the Special Committee.
The agreement is conditioned upon approval of the holders of two-thirds of
all outstanding shares of Sunburst and the approval by a majority of the shares
that are not held by members of the group of
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purchasing stockholders. The acquiring group has arranged financing for the
transaction through The Chase Manhattan Bank. Chase Securities Inc. is serving
as exclusive financial advisor to the group of investors led by Mr. Bainum.
"Management and the Board considered a number of alternatives over recent
months, and this offer from the Bainum family and certain members of management
was the best option presented for realizing shareholder value at Sunburst," said
Donald Landry, the Chief Executive Officer of Sunburst. Mr. Landry added, "I
have enjoyed leading Sunburst's growth and emergence as a public company, and am
proud of the way the management team has developed. As Sunburst converts to a
private company, it is time for me to hand the reins to the next generation of
management and contribute as an advisor. I look forward to continuing to be a
part of the Sunburst team, but I will step down as CEO as soon as we can
complete an orderly transition."
Sunburst also announced today that Jim MacCutcheon was elected by the Board
of Directors to the position of co-Chief Executive Officer and will become
President and Chief Executive Officer upon completion of an orderly transition
of CEO responsibilities from Don Landry. Sunburst also announced the promotions
of Kevin Hanley to the position of Executive Vice President and Chief Operating
Officer and Chuck Warczak to Senior Vice President and Chief Financial Officer.
"Don Landry has created significant value for all of our stakeholders since
joining our organization nine years ago and he has developed an extremely
capable team of corporate executives and hotel operators," said Stewart Bainum,
Jr., Chairman of the Board. "I am excited about Sunburst's transition into its
next phase of corporate life and about the future of the organization," added
Mr. Bainum.
Sunburst plans to file a proxy statement with the Securities and Exchange
Commission with respect to the proposed transaction, and the shareholder vote is
expected to be completed near the end of the year. Stockholders are advised to
read Sunburst's proxy statement when it is available because it will contain
important information about the transaction and the conflicts of interest of
certain directors and officers. Stockholders may obtain a free copy of
Sunburst's proxy statement and any other relevant documents after they are filed
with the U.S. Securities and Exchange Commission's web site at www.sec.gov.
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This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, which are intended to be covered by the safe
harbors created thereby. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, including without limitation, future
action or inaction by the Board of Directors and stockholders of Sunburst and
regulatory authorities with respect to the matters referred to in this press
release. Although Sunburst believes that the assumptions contained herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this press
release will prove to be accurate. Sunburst does not assume any obligation to
update any forward looking statements contained in this release.
