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 A LETTER DELIVERED BY AMERICAN SKIING COMPANY TO ITS
EMPLOYEES ON DECEMBER 11, 2000. THE FOLLOWING DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES FOR SALE.
To [RESORT NAME] staff:
I am very pleased to share the news of the next step in the evolution of our
company.
Today, American Skiing Company, the largest operator of ski resorts in the U.S.,
announced a plan to merge with MeriStar Hotels and Resorts, and form a new
company named Doral International.
Doral International combines the best of two complementary companies, and will
create unique offering in the leisure travel market. Its assets will include 9
premium ski resorts, 31 resort hotels, 194 hotels and inns, 16 golf courses and
5 conference facilities. The company will also control prime mountain and beach
real estate available for development of over 14,000 units.
We are very excited to merge with an outstanding organization such as MeriStar.
MeriStar is the nation's largest independent, non-branded hotel leasing and
management company, leasing and/or managing 225 hotels with more than 48,000
rooms in the U.S, Canada and the Caribbean. The company operates hotels under
brands including Hilton, Sheraton, Radisson and Westin. It also operates beach
resorts, ten major golf destinations, conference centers and extended-stay
executive housing.
Since the origination of American Skiing Company, we have all dedicated our time
and efforts to building what has become the largest winter resort company in the
nation. Although the weather has not been kind to the ski industry for the last
two seasons, we continued to grow our company. In just the past twelve months,
we completed significant real-estate projects in the east and the west. We
recently celebrated the grand opening of the finest hotel in Colorado ski
country, the Steamboat Grand Hotel in Steamboat Springs. We added new features
and services at our resorts, including the Sundial Lodge the Grand Summit Resort
Hotel and an entirely a new mountain area at The Canyons. We've built a stunning
new gondola at Heavenly, and a major new snowmaking investment at Killington is
up and running. Despite the weather of the past two seasons, our market shares
grew or stayed neutral across the country.
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I've always believed that a growing company is one in which energy and
enthusiasm are contagious. This merger creates the energy that will enhance our
work environment, provide shareholder value, improve guest experience and
provide growth opportunities for our staff and our surrounding communities.
That's why we're making this move
This is a very positive development for [RESORT NAME], American Skiing Company,
our staff, our communities and our customers. I would like to share just a few
of the many benefits of the merger with you.
1) The deal combines the incredible growth potential of American Skiing
Company's assets with the stable, year-round revenues of MeriStar. It also
"delevers" the company, which means the new company's debt position will be
improved. This will give us easier access to capital for improvements and
expansions, and make the new company's stock attractive to investors.
2) This is a major step in helping us reach our long-term goal of creating a
year-round business, instead of being a seasonal one. The merger will
create a company poised to become a leader in the resort destination
business - not just skiing, not just summer, but a year-round destination
company.
3) The deal creates additional financial strength, which means that the
company will be able to get back on track with its growth plans. This, in
turn, will produce a more stable employee environment and create new
opportunities for your professional growth.
4) The merger combines two complementary businesses. The two companies are
related, but different. There's very little redundancy in our work force or
areas of expertise, so we will be able to capitalize from the strengths and
human resources from each company. There will be no changes to the
organizational structure of [RESORT NAME] as a result of the merger.
5) We have an opportunity to improve both companies' systems and procedures by
using a "best practices" approach, based on the excellent work that both of
our growing companies have achieved over the last several years.
6) Finally, the new company will be much more than the sum of its parts. We
will have the opportunity to access more than 20 million guest visits each
year. We will be the first company of its kind in the leisure business. We
can expand our development expertise into new markets, and that will add to
our appeal in existing markets. Most importantly, we can create an
unmatched guest experience. We plan to make Doral International the leader
in the four-season resort destination business.
The creation of Doral International is a true merger, in which two companies
join to create a much stronger one. The company will be comprised of four major
leisure and hospitality business units. The first, the Doral Leisure division,
will specialize in year-round resorts, and includes 23 upscale destination
resorts, four conference centers and 15 golf courses. Products and services will
include our skiing and snowboarding facilities, resort hotels, executive
conference centers, golf courses, spas, restaurants and retail outlets. Doral
Leisure also will operate the company's well-recognized schools for golf and
skiing, featuring the company's proprietary instructional methods. BJ Fair,
chief operating officer of American Skiing Company and president of resort
operations, will lead the Doral Leisure division.
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The company's second business segment, hotel management, will focus on managing
upscale, full-service, hotels under a wide variety of franchise flags, including
Westin, Radisson and Hilton. Doral International will be the nation's largest
independent operator of hotels, with a management portfolio of more than 200
properties in the United States, Canada and the Caribbean. David McCaslin, who
has more than 20 years of industry experience and who is currently president of
MeriStar Hotels & Resorts, will lead the hotel management division.
Doral International's third business segment, which also will report to David
McCaslin, will be international corporate housing under the BridgeStreet
Accommodations brand, with more than 3,700 units in the United States and
Europe. Currently the world's third largest provider of corporate housing,
BridgeStreet Accommodations serves a broad cross-section of major international
corporations with facilities in the United States and Europe. Real estate,
Doral's fourth business unit, will focus on development of upscale vacation
villages and resort real estate. The division plans to introduce and market to
owners the Doral Owners Club, an upscale, full-service travel and lifestyle
organization that will offer purchasers of the company's real estate a variety
of amenities. Hernan Martinez, chief operating officer of American Skiing
Company Resort Properties, will be responsible for Doral International's Real
Estate division.
Following the merger, I will serve a chairman of the board; Paul W. Whetsell,
currently MeriStar's chairman and chief executive officer, will be CEO. Paul and
I have great expectations for Doral International. John Emery, currently
MeriStar's chief financial officer, will assume CFO duties of Doral
International.
We will immediately establish transition teams within each department to help us
identify the best practices for ongoing operations. Our goal is to develop a
company culture that reflects Doral International's commitment to quality and
its respect for our customers, our staff and our shareholders. We have a unique
opportunity to build on the best of both organizations and create a truly
special company.
We expect to complete the merger in the late winter or early spring. Your
supervisor will be kept informed of this exciting new opportunity, and I
encourage you to speak with him or her if you have any questions. Due to federal
securities laws, the company will have a limited ability to discuss additional
details until after the merger is completed. We'll do our very best to keep you
informed during this period, within the limits prescribed by the law.
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Once we complete the merger, you'll be part of a larger, stronger, deeper
company with much more to offer its staff and its customers. I hope you share my
excitement, and wish you the very best for a fun, safe and exciting ski season.
Sincerely,
/s/ Leslie B. Otten
Leslie B. Otten, Chairman
American Skiing Company
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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.
