<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 24, 1998
COMMISSION FILE NUMBER 1-6828
STARWOOD HOTELS & RESORTS
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction
of incorporation or organization)
52-0901263
(I.R.S. employer identification no.)
2231 EAST CAMELBACK ROAD., SUITE 410
PHOENIX, ARIZONA 85016
(Address of principal executive offices,
including zip code)
(602) 852-3900
(Registrant's telephone number, including area code)
COMMISSION FILE NUMBER: 1-7959
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
MARYLAND
(State or other jurisdiction
of incorporation or organization)
52-1193298
(I.R.S. employer identification no.)
2231 EAST CAMELBACK ROAD, SUITE 400
PHOENIX, ARIZONA 85016
(Address of principal executive
offices, including zip code)
(602) 852-3900
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On February 24, 1998, Starwood Hotels & Resorts and Starwood Hotels &
Resorts Worldwide, Inc. issued two press releases, copies of which are attached
hereto as Exhibits 99.1 and 99.2, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 99.1 Press Release dated February 24, 1998.
Exhibit 99.2 Press Release dated February 24, 1998.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
By: /s/ Ronald C. Brown By: /s/ Alan M. Schnaid
-------------------------- ---------------------------------------
Ronald C. Brown Alan M. Schnaid
Senior Vice President and Vice President and Corporate Controller
Chief Financial Officer Principal Accounting Officer
Date: February 24, 1998
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INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated February 24, 1998.
99.2 Press Release dated February 24, 1998.
<PAGE> 1
NEWS BULLETIN
FROM: RE: STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
FRB 2231 EAST CAMELBACK RD. WORLDWIDE, INC.
SUITE 410 2231 EAST CAMELBACK RD.
PHOENIX, AZ 85016 SUITE 400
TRADED: NYSE (HOT) PHOENIX, AZ 85016
TRADED: NYSE (HOT)
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The Financial Relations Board, Inc.
FOR FURTHER INFORMATION:
<TABLE>
<S> <C> <C> <C>
AT THE TRUST: AT THE CORPORATION: AT THE FINANCIAL RELATIONS BOARD:
Barry Sternlicht Ron Brown Debi Ford Daniel Saks or Haris Tajyar
Chairman and CEO Senior VP and CEO Director of Investor Relations General Information
(203) 861-2100 (602) 852-3900 (602) 852-3370 (310) 442-0599
</TABLE>
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FOR IMMEDIATE RELEASE
Tuesday, February 24, 1998
STARWOOD HOTELS & RESORTS COMPLETES
$14.6 BILLION ACQUISITION OF ITT CORPORATION
Creates Largest Hotel & Gaming Company in the World
PHOENIX, AZ, February 24, 1998--Starwood Hotels & Resorts Worldwide, Inc. ("the
Corporation"), a hotel management and operating company, whose shares are
paired with and trade together as a unit (NYSE: HOT) with Starwood Hotels &
Resorts (the "Trust", and together with the Corporation, the "Company" or
"Starwood Hotels") a real estate investment trust, today announced the
completion of the previously announced acquisition of ITT Corporation
(NYSE:ITT). After yesterday's closing, Starwood Hotels' portfolio now includes
more than 650 hotels and resorts located in over 70 countries worldwide with
additional hotel and resort projects under development around the world.
"With the closing of the ITT acquisition, together with our recently completed
Westin acquisition, Starwood Hotels has emerged as a leader in the worldwide
leisure industry," said Barry S. Sternlicht, Chairman and Chief Executive
Officer of the Trust. "The ITT acquisition provides Starwood Hotels with a
collection of five of the world's leading hotel brands, a proprietary
acquisition pipeline of Westin and ITT managed hotels and, together with
Westin, an international infrastructure and critical mass that should enable
Starwood Hotels to capitalize on additional growth opportunities, both
domestically and internationally.
"I am quite proud that we have successfully concluded this merger. Starwood
Hotels now owns some of the finest assets and brands in the lodging industry.
Closing this complex transaction, obtaining all the necessary approvals and
securing appropriate financing while at the same time maximizing the value of
the disposition assets has taken herculean efforts of both the Starwood Hotels
& Resorts and Starwood Capital Group teams. Now, we will turn our focus to
maximizing the value of the acquired assets so that we can continue to drive
shareholder returns. The opportunities are very exciting.
"We expect our combined management teams to focus on leveraging Starwood
Hotels' tremendous size and capital structure in an effort to maximize the
efficiencies and true potential of the combined upscale, full-service asset
bases of Starwood Hotels, Westin and ITT. The extensive work already completed
by our internal integration teams together with Arthur Andersen, Perot Systems
and Towers Perrin has resulted in integration road maps the implementation of
which are already underway. In so doing, we expect to achieve significant
revenue enhancement as well as substantial cost savings, operating synergies,
and economies of scale that should enable us to achieve significant internal
growth rates in 1998 and beyond," concluded Mr. Sternlicht.
-more-
Financial Relations Board, Inc. serves as financial relations counsel to this
company, in acting on the company's behalf in issuing this bulletin and
receiving compensation therefor. The information contained herein is furnished
for information purposes only and is not to be construed as an offer to buy or
sell securities.
<PAGE> 2
STARWOOD HOTELS & RESORTS
ADD 1
FINAL CASH AND STOCK ELECTION RESULTS
Starwood Hotel's Exchange Agent, ChaseMellon Shareholder Services, LLC,
indicated that the following final elections have been made with respect to the
117,318,879 shares of outstanding ITT Common Stock at the effective time of the
merger:
- Cash elections 86,977,138
- Stock elections 19,972,721
- Non-electing 10,369,019
Under the terms of the acquisition, each outstanding share of ITT common stock,
other than those shares that were converted into cash pursuant to a cash
election by the holder, was converted into 1.543 Paired Shares of Starwood
Hotels. Pursuant to the cash election procedures, approximately 35,195,664, or
approximately 40%, of those shares for which cash elections were made will be
converted into cash. The Company expects to commence mailing cash payments and
delivering stock certificates to ITT shareholders on Tuesday, February 24, 1998.
In addition, ITT shareholders will receive additional cash consideration in the
amount of approximately $0.37 per share as interest from January 31, 1998
through February 23, 1998. Fractional Paired Shares occurring from the
conversion will be paid in cash at the rate of approximately $53.90 per Paired
Share. The amount was determined based on the average of closing prices of
Starwood Hotels Paired Shares on the NYSE for the five consecutive trading days
beginning with February 13, 1998 and ending on February 20, 1998, the trading
day immediately prior to the effective date of the merger.
All outstanding securities of ITT were delisted from trading on the NYSE at the
close of business on February 23, 1998.
FINANCING
In connection with the ITT acquisition, Starwood Hotels is entering into credit
facilities with a group of financial institutions arranged by Bankers Trust
Company, Chase Securities Inc. and Lehman Brothers Inc. representing an
aggregate of approximately $5.6 billion.
In addition, as a source of cash to fund the exercise of stock appreciation
rights by certain ITT executives, Starwood Hotels is entering into a $250
million private placement of approximately 4.6 million Paired Shares with
Lehman Brothers Inc., Merrill Lynch & Co. and NationsBank Montgomery
Securities. Separately, Starwood Hotels entered into related agreements with
the purchasers of their affiliates which provide that during the one-year term,
Starwood Hotels has the right at any time to deliver or receive Paired Shares
in settlement of the agreement, based on the market price of the Paired Shares
at the time of the election.
Starwood Hotels, through its ITT Sheraton and Westin subsidiaries, is the
largest hotel operating company in the world and the largest real estate
investment trust in the United States. Shares of Starwood Hotels & Resorts
Worldwide, Inc. are paired and trade together with Starwood Hotels & Resorts.
Starwood Hotels & Resorts Worldwide, Inc. leases properties from Starwood
Hotels & Resorts and operates them directly, through its subsidiaries or third
party management companies.
-more-
<PAGE> 3
STARWOOD HOTELS & RESORTS
ADD 2
(Note: Statements in this press release which are not historical may be deemed
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although Starwood Hotels believes the
expectations reflected in any forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ materially from
Starwood Hotels expectations include completion of pending acquisitions,
continued availability of acquisitions, continued availability of debt and
equity on favorable terms, legislative proposals to limit activities of
paired-share real estate investment trusts, foreign exchange fluctuations,
performance of hotel operations, financial performance, real estate conditions,
market valuations of its stock, execution of hotel renovation programs, changes
in local or national economic conditions and other risks detailed from time to
time in the Starwood Hotels SEC reports, including quarterly reports on Form
10-Q, reports on Form 8-K and annual reports on Form 10-K.)
###
<PAGE> 1
NEWS BULLETIN
FROM: RE: STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
FRB 2231 EAST CAMELBACK RD. WORLDWIDE, INC.
SUITE 410 2231 EAST CAMELBACK RD.
PHOENIX, AZ 85016 SUITE 400
TRADED: NYSE (HOT) PHOENIX, AZ 85016
TRADED: NYSE (HOT)
- -------------------------------------------------------------------------------
The Financial Relations Board, Inc.
FOR FURTHER INFORMATION:
<TABLE>
<S> <C> <C> <C>
AT THE TRUST: AT THE CORPORATION: AT THE FINANCIAL RELATIONS BOARD:
Barry Sternlicht Ron Brown Debi Ford Daniel Saks or Haris Tajyar
Chairman and CEO Senior VP and CFO Director of Investor Relations General Information
(203) 861-2100 (602) 852-3900 (602) 852-3370 (310) 442-0599
</TABLE>
- -------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
Tuesday, February 24, 1998
STARWOOD HOTELS & RESORTS CLARIFIES EARLIER
ANNOUNCEMENT OF FINANCING RELATED TO ITT ACQUISITION
Creates Largest Hotel & Gaming Company in the World
PHOENIX, AZ, February 24, 1998--Starwood Hotels & Resorts Worldwide, Inc. ("the
Corporation"), a hotel management and operating company, whose shares are
paired with and trade together as a unit (NYSE: HOT) with Starwood Hotels &
Resorts (the "Trust", and together with the Corporation, the "Company" or
"Starwood Hotels") a real estate investment trust, clarified its earlier
announcement concerning the equity financing related to the acquisition of ITT.
The proceeds of $250 million from the previously announced private placement
have been used to fund the exercise of previously outstanding stock
appreciation rights by certain ITT executives. This private placement was a
"forward spot" sale of approximately 4.6 million paired shares. This
transaction has closed. The transaction will settle within a one-year term, at
Starwood Hotels elections based on the market price of paired shares at the
time of settlement.
Starwood Hotels, through its ITT Sheraton and Westin subsidiaries, is the
largest hotel operating company in the world and the largest real estate
investment trust in the United States. Shares of Starwood Hotels & Resorts
Worldwide, Inc. are paired and trade together with Starwood Hotels & Resorts.
Starwood Hotels & Resorts Worldwide, Inc. leases properties from Starwood Hotels
& Resorts and operates them directly, through its subsidiaries or third party
management companies.
(Note: Statements in this press release which are not historical may be deemed
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Although Starwood Hotels believes the
expectations reflected in any forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
attained. Factors that could cause actual results to differ materially from
Starwood Hotels expectations include completion of pending acquisitions,
continued availability of acquisitions, continued availability of debt and
equity on favorable terms, legislative proposals to limit activities of
paired-share real estate investment trusts, foreign exchange fluctuations,
performance of hotel operations, financial performance, real estate conditions,
market valuations of its stock execution of hotel renovation programs, changes
in local or national economic conditions and other risks detailed from time to
time in the Starwood Hotels SEC reports, including quarterly reports on Form
10-Q reports on Form 8-K and annual reports on Form 10-K.)
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