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Exhibit 99.4
FOR IMMEDIATE RELEASE: FOR FURTHER INFORMATION:
Lisa O'Connor
Investor Relations
412-937-3319
Tom Loftus
Corporate Communications
412-937-3382
INTERSTATE HOTELS CORPORATION REITERATES REJECTION OF
UNSOLICITED PROPOSAL
AND REAFFIRMS SUPPORT OF LEHMAN GROUP INVESTMENT
PITTSBURGH, PENNSYLVANIA, OCTOBER 8, 2000 -- Interstate Hotels Corporation
(Nasdaq:IHCO) today announced that it has received an unsolicited letter from
the Shaner Hotel Group following up on Shaner's previously disclosed unsolicited
conditional proposal to purchase all of the shares of common stock of the
Company for $4.125 per share in cash.
The follow-up letter stated that (1) Shaner would be prepared to proceed now
with due diligence without an agreement from the Company to sell at $4.125 per
share, (2) Shaner would deposit $250,000 in escrow that would be refundable only
if Shaner submitted an unconditional bid at or above $4.125 per share, (3) that
such an unconditional bid would not be conditioned on any necessary third party
consents, and (4) the price of $4.125 is subject to increase based on Shaner's
due diligence review of the Company.
The Board of Directors of Interstate, after considering the follow-up letter,
has determined that the conditional Shaner proposal is not reasonably likely to
be completed and that the previously announced transaction with an investor
group led by Lehman Brothers is financially superior to the transaction proposed
by Shaner. In making its determination, the Interstate Board considered, among
other things, its obligations under its agreement with the Lehman group, the
nature of the Company's business, and the difficulty of consummating the
transaction proposed by Shaner without the consent of various third parties,
including parties to the Company's management and franchise agreements.
ACCORDINGLY, THE BOARD REITERATED ITS DETERMINATION THAT PURSUING THE SHANER
PROPOSAL IS NOT IN THE BEST INTEREST OF THE COMPANY'S STOCKHOLDERS AND
REAFFIRMED ITS RECOMMENDATION THAT STOCKHOLDERS APPROVE THE LEHMAN BROTHERS
INVESTMENT.
The stockholders meeting to approve the Lehman transaction is scheduled for
October 16, 2000. The Lehman group has agreed to invest $30 million in
convertible preferred stock and notes of the Company, arrange for a line of
credit of at least $25 million and invest in a joint venture with
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the Company, which the Company and the Lehman group believe can acquire up to
$300 million in hotel assets that will be managed by the Company.
Interstate Hotels Corporation operates approximately 160 hotels with more than
30,000 rooms in 38 states in the United States as well as Canada, the Caribbean
and Russia. For more information, visit www.interstatehotels.com.
* * * * * *
Certain matters discussed within this press release are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Although the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it cannot give
assurance that its expectations will be attained. Factors that could cause
actual results to differ materially from expectations include financial
performance, real estate conditions, execution of hotel development programs,
changes in the availability of additional management contracts, leases or
acquisitions, changes in local or national economic conditions and other risks
detailed from time to time in the Company's reports filed with the SEC.
