SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(a) (2))
[ ] Definitive Proxy Statement
[X ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
LODGIAN,INC.
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(Name of Registrant as Specified in Its Charter
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(Name of Person(s) Filing Proxy Statement if other than the Registrant
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11. N/A
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No. 1
(3) Filing Party:
(4) Date Filed:
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LODGIAN, INC. [LODGIAN logo]
3445 PEACHTREE ROAD
ATLANTA, GA 30326
www.lodgian.com
NYSE:LOD
AT LODGIAN, INC.
Robert Cole Thomas Eppich
Chief Executive Officer Chief Financial Officer
[email protected] [email protected]
(404) 365-3800 (404) 365-4469
AT THE FINANCIAL RELATIONS BOARD/BSMG
Leslie Hunziker Georganne Palffy
General Information Analysts/Investors
[email protected] [email protected]
(312) 640-6760 (312) 640-6768
PROXY SOLICITOR
D.F. King & Co., Inc.
800-769-6414
FOR IMMEDIATE APPROVAL
WEDNESDAY, OCTOBER 18, 2000
LODGIAN RESPONDS TO PROPOSAL FROM YUNG GROUP;
PREVAILS IN LAWSUIT OVER ANNUAL MEETING
ATLANTA - OCTOBER 18, 2000 - LODGIAN, INC. (NYSE: LOD) confirmed today that it
has received a proposal from an affiliate of William Yung to acquire all
outstanding shares of the Company for a cash purchase price of $5.00 per share.
Although the proposal is subject to due diligence and other customary
conditions, the Company is delighted that the Yung group is willing to
participate in the process to maximize value for all Lodgian shareholders.
Lodgian will provide the Yung group access to due diligence information once the
Yung group executes a confidentiality agreement containing a reasonable
standstill clause, which would not preclude participation in the current proxy
contest. Whitehall Street Real Estate Limited Partnership XIII and its affiliate
submitted a proposal last week to acquire Lodgian at a cash purchase price of
$4.50 per share, subject to due diligence and other conditions.
Robert S. Cole, chief executive officer of Lodgian, said, "Our desire is to
negotiate the best possible transaction for our shareholders, whether that
transaction be with Whitehall, Edgecliff or any other third-party. We are also
committed to conducting a full and fair sale process which we are hopeful will
include the Yung group." A copy of Lodgian's October 18, 2000, letter to Mr.
Yung is attached to this press release.
Lodgian also announced that a Delaware court rejected efforts by the Yung group
to require the Company to hold its annual meeting prior to October 20, 2000, to
invalidate proxies received by the Company after 9:30 a.m. on October 11, 2000,
and to prevent the Company from taking any action in connection with the
Whitehall proposal or any other proposal from a third-party. The annual meeting,
which had been postponed from October 11, 2000, so that shareholders could
consider important information regarding the acquisition proposal from
Whitehall, will be held as announced in Atlanta on Friday, October 20, 2000,
9:30 a.m., at The Resource Forum, 3340 Peachtree Road, N.E. Cole said, "The Yung
group's attempts through the court to prevent the Company and its shareholders
from considering the Whitehall proposal clearly demonstrate the Yung group's
desire to take control of Lodgian through a non-competitive process. We are
pleased that the court has stifled this attempt to prevent a non-competitive
bidding process from taking place."
Lodgian will continue to solicit proxies in favor of its nominees because the
Company believes the best way to maximize value for all Lodgian shareholders is
to keep the Yung group off the Lodgian board so that it can participate in a
competitive sale process as an unaffiliated, arms-length bidder. "This will also
allow our board to pursue such a process and achieve the highest possible price
for our shareholders without actual or perceived interference by the Yung group
as an interested party that naturally wants to pay the lowest possible price,"
said Cole.
Shareholders who voted in favor of the Yung group's nominees are permitted to
change their votes by submitting a later-dated white proxy card voting in favor
of the Company's nominees or voting in person at the annual meeting.
Shareholders who have any questions as to how to vote their shares or wish to
obtain a new proxy card, should call Robert Cole at (404) 365-3800 or the
Company's proxy solicitor, D.F. King & Co., Inc., toll free at 1-800-769-6414.
Lodgian has not entered into a definitive agreement with Whitehall and Lodgian
is not required to pay any break-up fee to Whitehall unless and until a
definitive agreement is signed with Whitehall. Lodgian's only financial
obligation to Whitehall is to reimburse Whitehall the expenses that it incurs
(up to $3,500,000) in connection with evaluating and pursuing a transaction with
Lodgian in the event that Lodgian and Whitehall do not enter into definitive
agreements for a transaction by December 10, 2000.
On January 12, 2000, Lodgian announced that it had engaged Morgan Stanley Dean
Witter to assist its board of directors in the exploration of strategic
alternatives for the purpose of maximizing shareholder value. Morgan Stanley
Dean Witter continues to advise the Company as the sale process proceeds.
ABOUT LODGIAN
Lodgian, Inc. owns or manages a portfolio of 117 hotels with approximately
21,700 rooms in 32 states and Canada. The hotels are primarily full service,
providing food and beverage service, as well as meeting facilities.
Substantially all of Lodgian's hotels are affiliated with nationally recognized
hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton,
Hilton, Doubletree and Westin.
Lodgian's common shares are listed on the New York Stock Exchange under the
symbol "LOD". Lodgian is a component of both the Russell 2000(R) Index,
representing small cap stocks, and the Russell 3000(R) Index, representing the
broader market.
Forward-Looking Statements Note:
Statements in this press release that are not strictly historical are
"forward-looking" statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks, which may cause the
Company's actual results in the future to differ materially from expected
results. These risks include, among others, the termination of a letter of
intent, competition within the lodging and contract service industries; the
relationship between supply and demand for hotel rooms; the effects of economic
conditions; issues associated with the ongoing integration of the former
Servico, Inc. and Impac Hotel Group, LLC; the acquisition and renovation of
existing hotels and the development of new hotels; operating risks; the cyclical
nature of the lodging industry; risks associated with the dependence on
franchisers of the Company's lodging properties; and the availability of capital
to finance planned growth, as described in the Company's filings with the
Securities and Exchange Commission.
For more information on Lodgian toll-free via fax, dial 1-800-PRO-INFO
(1-800-776-4636), follow the voice menu prompts and enter the
company ticker LOD (or 563) or visit the Lodgian page
on the FRB web site at www.frbinc.com
Visit Lodgian at www.lodgian.com
-ATTACHMENT FOLLOWS-
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LODGIAN, INC. [LODGIAN logo]
3445 PEACHTREE ROAD
ATLANTA, GA 30326
www.lodgian.com
NYSE:LOD
October 18, 2000
Mr. William Yung
President
Edgecliff Holdings, LLC
207 Grandview Drive
Fort Mitchell, Kentucky 41017
Dear Mr. Yung:
Thank you for your letter dated October 16, 2000, in which Edgecliff Holdings,
LLC ("Edgecliff") expressed its interest in acquiring all of the capital stock
of Lodgian, Inc, ("Lodgian") at $5.00 per share in cash. We are delighted that
Edgecliff is willing to participate in the process to achieve maximum value for
all Lodgian shareholders. We are prepared to respond to your inquiries and
negotiate a possible transaction with Edgecliff, subject to our fiduciary
obligations to our shareholders.
As you know, Lodgian has received a non-binding proposal from Whitehall Street
Real Estate Limited Partnership XIII and Whitehall Parallel Real Estate Limited
Partnership XIII (collectively, "Whitehall") to acquire Lodgian for a cash
purchase price of $4.50 per share, subject to adjustments. The Whitehall
proposal is subject to due diligence and the negotiation and execution of
definitive agreements. We have also entered into an agreement with Whitehall
under which we are permitted to provide you (and any other third party) access
to due diligence information if:
o Our board determines that Edgecliff is capable of making an offer to
acquire Lodgian that is more favorable than the proposed transaction with
Whitehall and is likely to result in a transaction that will close; and
o Edgecliff executes the enclosed form of confidentiality agreement, which
includes a reasonable standstill clause. This reflects our desire to give
Edgecliff every opportunity to have access to the same information as we
are now beginning to provide to Whitehall and which we have provided to
other bidders who have been willing to agree to a longer standstill period.
Please have your advisors contact our advisors to discuss a reasonable
standstill agreement.
We hope that Edgecliff will respond to this request promptly as we would like to
move forward and discuss in detail the terms of a proposed transaction with
Edgecliff. As you know, under our agreement with Whitehall, if our board
determines in good faith that its fiduciary duty so requires, we are permitted
to consider an acquisition proposal from Edgecliff (or any third party) that is
more favorable to Lodgian's stockholders than the transaction proposed by
Whitehall if (i) we notify Whitehall that we are considering such an offer and
(ii) Whitehall does not make an offer within 5 days that our board determines is
at least as favorable as Edgecliff's (or such other third party's) proposal.
However, if for any reason we do not enter into definitive agreements with
Whitehall for a transaction by December 10, 2000, our only obligation is to
reimburse Whitehall the expenses that it incurs (up to $3,500,000) in connection
with evaluating and pursuing a transaction with Lodgian.
Again, we are pleased that Edgecliff has expressed an interest in acquiring
Lodgian. Our desire is to negotiate the best possible transaction for our
shareholders, whether that transaction be with Whitehall, Edgecliff or any other
third party. We are also committed to conducting a full and fair sale process.
As I am sure you can appreciate, however, before we can pursue a transaction
with Edgecliff (or any other third party) our existing contractual commitments
require us to comply with the requirements referred to above. We believe these
requirements are reasonable and in the best interests of Lodgian and our
shareholders.
Lodgian and its advisors are available at any time to discuss our requests and
answer any questions you or your advisors may have. We look forward to hearing
from you soon.
Very truly yours,
/s/ Robert S. Cole
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Robert S. Cole
President and Chief Executive Officer
