SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy statement pursuant to Section 14(a) of the Securities
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Meditrust Corporation
Meditrust Operating Company
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<PAGE>
MEDITRUST AND LA QUINTA ANNOUNCE PRELIMINARY EXCHANGE RATIO
AND PRELIMINARY EARNINGS AND PROFITS DISTRIBUTION
Meditrust Obtains $2.25 Billion In Financing Commitments
Needham Heights, MA and San Antonio, TX -- June 10, 1998 -- The Meditrust
Companies (NYSE: MT) and La Quinta Inns, Inc. (NYSE: LQI) announced today the
preliminary exchange ratio and the preliminary earnings and profits distribution
to be paid in connection with the merger of La Quinta into Meditrust
Corporation. Based on the previously announced Meeting Date Price of $28.75625,
the preliminary exchange ratio for La Quinta shares to be converted in the
merger into paired shares of The Meditrust Companies is 0.738 Meditrust paired
shares for each La Quinta share. La Quinta's Board of Directors has unanimously
determined to proceed with the merger. Shareholder meetings to approve the
transaction are scheduled for June 18, 1998 and the closing is expected to occur
shortly thereafter.
La Quinta shareholders who receive stock consideration in the merger will
receive Meditrust paired shares and will be eligible to receive a special
dividend distribution of La Quinta's accumulated but undistributed earnings and
profits. The special dividend distribution on a preliminary basis is $0.88361
per Meditrust paired share ($0.65170 per La Quinta share that is converted into
Meditrust paired shares, based on the preliminary exchange ratio). The special
dividend distribution is expected to be payable to all Meditrust shareholders of
record on a date to be determined by Meditrust between the 15th and the 45th day
following the effective date of the merger and will be paid within 15 days of
such record date.
The combined amount of the paired shares to be issued in the merger to La Quinta
shareholders and the special dividend distribution, on a preliminary basis, is
equal to approximately $21.87 per each share of La Quinta common stock, based on
a value for Meditrust's paired shares equal to the Meeting Date Price.
Alternatively, La Quinta shareholders may elect to receive $26.00 in cash for
each La Quinta share, subject to certain limitations described below. If all La
Quinta shareholders elected cash, the blended value of cash received, paired
shares to be received and the special dividend distribution is approximately
$22.87 per La Quinta share.
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The total cash payable in the merger and the portion of the earnings and profits
distribution payable with respect to paired shares issued in the merger to La
Quinta shareholders is limited to $521 million in the aggregate. If the total
cash elections in the merger exceed the maximum cash available to be paid in the
merger, the available cash will be prorated among La Quinta shareholders making
cash elections. Based on the preliminary numbers set forth above, the maximum
number of La Quinta shares that may receive cash is approximately 18.6 million.
As described in the joint proxy statement/prospectus dated May 18, 1998 relating
to the transaction, cash election forms must be properly completed and received,
along with all other required documents and certificates, by the exchange agent
no later than 5:00 p.m., Boston time, on Monday, June 15, 1998.
The preliminary numbers are subject to change based upon the number of La Quinta
shares electing to receive cash in the merger. The final amount of the earnings
and profits distribution and the final exchange ratio will be announced on June
16, 1998.
Meditrust also announced today that it has obtained signed commitments from four
underwriters, including J.P. Morgan & Co., BT Alex. Brown, Incorporated, Fleet
National Bank and BankBoston, to provide a $2.25 billion credit facility to
Meditrust. The credit facility consists of a $1.5 billion three-year revolving
credit line and a $750 million one-year term loan. The $2.25 billion is expected
to be used to finance the cash portion of the La Quinta transaction, future
Meditrust acquisitions and general corporate purposes.
Abraham D. Gosman, Chairman of the Board of The Meditrust Companies, said, "We
are enthusiastic about receiving commitments for $2.25 billion which will
provide us with the capital necessary to complete the La Quinta transaction and
give us additional financial flexibility in executing our growth strategy. We
appreciate the support of our lead lenders who have demonstrated their
confidence in Meditrust."
Meditrust and La Quinta shareholders who have any questions or need assistance
in voting their shares can call the companies' joint proxy solicitor, D.F. King
& Co., Inc., toll-free at (800) 578-5378.
La Quinta Inns, Inc., a leader in the mid-price segment of the lodging industry,
owns and operates 280 hotels and approximately 36,000 rooms and suites in 28
states.
The Meditrust Companies, a paired share real estate investment trust and the
nation's largest health care real estate investment trust, with headquarters in
Needham, Massachusetts, consists of Meditrust Corporation and Meditrust
Operating Company. As of March 31, 1998, Meditrust had investments in 474 health
care facilities in 40 states with 37 different operators and has a total market
capitalization of approximately $3.0 billion.
