Filed by American Skiing Company
Pursuant to Rule 425 under the Securities Act of 1933 and Deemed
Filed Pursuant to Rule 14A-12 Under the Securities Exchange Act of 1934
Subject Company: MeriStar Hotels and Resorts, Inc.
Commission File No.: 1-14331
THE FOLLOWING IS A COPY OF CERTAIN PREPARED STATEMENTS MADE BY MR. OTTEN IN A
CONFERENCE WITH INVESTORS AND MEDIA ON DECEMBER 11, 2000. THE FOLLOWING DOES NOT
CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE.
Thank you Paul and good afternoon everyone. The merger between MeriStar
Resorts & Hotels and American Skiing Company and the formation of Doral
International is an incredible combination for us. Not only does this
transaction accelerate the realization of opportunities for the two respective
entities, but it also creates entirely new channels for growth. This allows us
to deliver shareholder value faster and with greater surety than we could
separately with our existing business.
I'd like to start by briefly discussing how this merger creates value
for American Skiing Company customers and shareholders and how Doral
International will be able to leverage it's internationally recognized brands
into the premier leisure and hospitality company worldwide.
We believe this merger is strategic to American Skiing Company for
several reasons:
First, Doral International combines American Skiing Company's 9 premium resorts
and extensive real estate development potential with the stable, year-round
revenues of MeriStar's hotel and resort management business. This significantly
reduces the volatility of our financial performance due to the weather, results
in more stable and predictable cash flow stream, and diminishes the seasonality
of our earnings. Over the years, American Skiing Company has demonstrated that
it is the most progressive player in the alpine resort industry. Our real estate
business has over $1.5 billion in project development opportunities in the
pipeline at The Canyons alone. And with the improved access to capital and
complementary relationship with MeriStar Hospitality (the REIT), we are
optimistic about the growth prospects in both our resort and real estate
divisions going forward.
Secondly, this combination results in a wider selection of year-round
leisure offerings for our over 5 million annual visitors. Additionally we will
gain access to the 18 million additional customers that visit the MeriStar
properties each year. This will allow us to significantly broaden our marketing
exposure and effectively compete year round in the $2.8 trillion leisure market.
Next, this transaction reduces our dependence on debt creating a more
stable financial foundation for American Skiing Company. As a company, we have
made highly targeted on-mountain investments over the last several years. With
the last two ski seasons being the worst in recent memory, we have not realized
our desired return on these investments. Consequently, as we have grown the
Company over this time period, leverage has become an issue. With a strong early
start to this ski season, we are finally teed up to capitalize on these
strategic investments. From the build out of Canyons and the introduction of the
Heavenly gondola -- to increased snowmaking across the entire network,
highlighted by a 30% expansion at Killington, we are set to naturally de-lever
the business through harvested returns on our investments and improved operating
performance. The merger and formation of Doral International will serve to
accelerate that process. Additionally, the restructuring of both series of
preferred stock, the expansion of the senior credit facility, and the improved
terms of our real estate facility, will result in meaningful interest savings
and a more secure over all capital structure.
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From a management and organizational standpoint, MeriStars's hotel
management capabilities are an ideal complement to those of our resort operating
staff, who are among the most experienced in the ski industry. Efficiencies are
immediately recognizable as we eliminate overhead redundancies, centralize
processes, and benefit from the increased purchasing power available to Doral.
We would also anticipate greater accessibility to human resources as the
combined companies can now tap into a much larger pool of management and
operating personnel both internally and externally.
All in all, the combination of American Skiing and MeriStar assets
results in a much stronger engine for growth and value creation than either
company has on a stand-alone basis. This is a powerhouse combination that will
not only give us a dominant presence in the U.S. leisure and hospitality market,
but also enhance our ability to serve our guests and employees by providing the
financial strength and management depth to accelerate our growth opportunities
internationally.
Now, I would like to turn it over to John Emery for the Doral
International Presentation.
John?
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American Skiing Company plans to file a Registration Statement on Form
S-4 with the SEC in connection with the merger transaction. The Form S-4 will
contain a prospectus, a proxy statement for the special meetings of both
American Skiing and MeriStar Hotels & Resorts, Inc. and other documents.
American Skiing and MeriStar plan to mail the joint proxy statement and
prospectus contained in the Form S-4 to their stockholders. The Form S-4 and
joint proxy statement and prospectus will contain important information about
American Skiing, Meristar, the merger and related matters. Investors and
stockholders should read the joint proxy statement and prospectus and the other
documents filed with the SEC in connection with the merger carefully before they
make any decision with respect to the merger. A copy of the merger agreement
with respect to the merger will be filed by both American Skiing and Meristar as
an exhibit to each's respective Form 8-K dated December 11, 2000. The Form S-4,
the joint proxy statement and prospectus, the Form 8-Ks and all other documents
filed with the SEC in connection with the merger transaction will be available
when filed free of charge at the SEC's web site, at www.sec.gov. In addition,
the proxy statement/prospectus, the Form 8-K and all other documents filed with
the SEC in connection with the merger will be made available to investors free
of charge by calling or writing to the American Skiing and MeriStar contact
addresses listed above.
In addition to the Form S-4, the joint proxy statement and prospectus
and the other documents filed with the SEC in connection with the merger, both
American Skiing and MeriStar are obligated to file annual, quarterly and special
reports, proxy statements and other information with the SEC. You may read and
copy any reports, statements and other information filed with the SEC at the
SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549
or at the other public reference rooms in New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on
public reference rooms. Filings with the SEC also are available to the public
from commercial document-retrieval services and at the web site maintained by
the SEC at www.sec.gov.
The identity of the people who, under SEC rules, may be considered
"participants in the solicitation" of MeriStar's stockholders in connection with
the proposed merger, and a description of their interests, is available in an
SEC filing on Schedule 14A, which will be made by MeriStar. A list of
"participants in the solicitation" of American Skiing's stockholders in
connection with the proposed merger, and a description of their interests, is
available in an SEC filing on Schedule 14A, which will be made by American
Skiing.
These materials contain forward-looking statements about MeriStar
Hotels & Resorts, Inc., including those statements regarding future operating
results and the timing and composition of revenues, among others. Except for
historical information, the matters discussed in these materials are
forward-looking statements that are subject to certain risks and uncertainties
that could cause the actual results to differ materially, including the
following: the ability of the companies to complete the merger, the ability of
the company to successfully implement its acquisition strategy and operating
strategy; the merged company's ability to manage rapid expansion; significant
leverage; changes in economic cycles; competition from other hospitality
companies; and changes in the laws and government regulations applicable to the
companies.
The historical and forward-looking statements about American Skiing
Company contained in these materials are not based on historical facts, but
rather reflect American Skiing Company's current expectations concerning future
results and events. Similarly, statements that describe the company's
objectives, plans or goals are or may be forward-looking statements. Such
forward-looking statements involve a number of risks and uncertainties. In
addition to factors discussed above, other factors that could cause actual
results, performances or achievements to differ materially from those projected
include, but are not limited to, the following: changes in regional and national
business and economic conditions affecting both American Skiing Company's resort
operating and real estate segments; competition and pricing pressures; failure
to effectively integrate or operate recently acquired companies and assets;
failure to renew or refinance existing financial liabilities and obligations or
attain new outside financing; failure of on-mountain improvements and other
capital expenditures to generate incremental revenue; adverse weather conditions
regionally and nationally; seasonal business activity; changes to federal, state
and local land use regulations; changes to federal, state and local regulations
affecting both American Skiing Company's resort operating and real estate
segments; litigation involving anti-trust, consumer and other issues; failure to
renew land leases and forest service permits; disruptions in water supply that
would impact snowmaking operations and impact operations; the loss of any of our
executive officers or key operating personnel; control of American Skiing
Company by principal stockholders; failure to hire and retain qualified
employees and other factors listed from time-to-time in American Skiing
Company's documents filed by the Company with the Securities Exchange
Commission. The forward-looking statements included in this document are made
only as of the date of this document and under section 27A of the Securities Act
and section 21E of the Exchange Act, we do not have any obligation to publicly
update any forward-looking statements to reflect subsequent events or
circumstances.
