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
April 27, 1999
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Date of Report (Date of Earliest Event Reported)
Starwood Hotels & Resorts Worldwide, Inc.
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(Exact Name of Registrant as Specified in its Organizational Documents)
Maryland 1-7959 52-1193298
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
777 Westchester Avenue
White Plains, New York 10604
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(Address of Principal Executive Offices and Zip Code)
(914) 640-8100
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Starwood Hotels & Resorts
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(Exact Name of Registrant as Specified in Charter)
Maryland 1-6828 52-0901263
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
777 Westchester Avenue
White Plains, New York 10604
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(Address of Principal Executive Offices and Zip Code)
(914) 640-8100
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On April 27, 1999, Starwood Hotels & Resorts Worldwide, Inc. entered
into a Stock Purchase Agreement, together with ITT Sheraton Corporation,
Starwood Canada Corp., Caesars World, Inc., Sheraton Desert Inn
Corporation, Sheraton Tunica Corporation and Park Place Entertainment
Corporation to sell (a) all of the issued and outstanding common stock of
Caesars World, Inc. and Sheraton Tunica Corporation and (b) Starwood Canada
Corp.'s partnership interests in Metropolitan Entertainment Group to Park
Place Entertainment Corporation for approximately $3.0 billion. The sale
is expected to close in the fourth quarter of 1999, and is subject to the
satisfaction of various conditions, including but not limited to obtaining
certain regulatory approvals. The joint press release announcing that the
Stock Purchase Agreement was entered into is included as Exhibit 99.1
hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of business acquired:
Not applicable
(b) Pro forma financial statements:
Not applicable
(c) Exhibits.
99.1 Joint Press Release of Park Place Entertainment and Starwood
Hotels & Resorts Worldwide, Inc. issued April 27, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: May 7, 1999
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ THOMAS C. JANSON, JR.
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Thomas C. Janson, Jr.
Executive Vice President, General Counsel
and Secretary
STARWOOD HOTELS AND RESORTS
By: /s/ THOMAS C. JANSON, JR.
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Thomas C. Janson, Jr.
Vice President, General Counsel
and Assistant Secretary
Exhibit Index
Exhibit Description
99.1 Joint Press Release of Park Place Entertainment and Starwood
Hotels & Resorts Worldwide, Inc. issued April 27, 1999.
Exhibit 99.1
Contacts: Geoffrey Davis
Park Place Entertainment
212-872-4603
Jim Gallagher (Media)
Starwood Hotels
914-640-8194
Dan Gibson (Investors)
Starwood Hotels
914-640-8175
PARK PLACE ENTERTAINMENT ANNOUNCES ACQUISITION OF
CAESARS WORLD INC. FROM STARWOOD HOTELS
NEW YORK APRIL 27, 1999 - Park Place Entertainment Corporation (NYSE: PPE)
announced today that it has entered into a definitive agreement to acquire
Caesars World Inc. and other gaming assets from Starwood Hotels & Resorts
Worldwide, Inc. (NYSE: HOT) for total consideration of $3.0 billion. This
sale excludes the Desert Inn in Las Vegas.
The all-cash transaction has been approved by the Board of Directors of
both companies and is expected to close in the fourth quarter of 1999.
Completion is subject to the satisfaction of various conditions contained
in the purchase agreement, including obtaining certain regulatory
approvals.
Starwood's gaming assets include the Caesars Palace in Las Vegas; Caesars
Atlantic City; Caesars Tahoe; Glory of Rome riverboat in Harrison County,
Indiana; the Sheraton Casino & Hotel in Tunica, Mississippi; management of
the slot operations at Dover Downs Racetrack in Dover, Delaware; and
various other joint venture, real estate and management contract interests
or licences for gaming properties in Halifax and Sydney, Nova Scotia;
Windsor, Ontario; Manila, Philippines; and Gauteng Province of South
Africa.
"This is an important transaction in that it provides significant benefits
for both companies," said Arthur Goldberg, president and CEO of Park Place.
"It meets all the conditions we established for making an acquisition - it
provides strategic assets; it should be accretive to earnings in the first
year; and it has potential for future growth opportunities."
"The acquisition of Caesars is strategic in that we obtain an
internationally recognized brand name and a portoloico of premier gaming
assets. These assets enhance our geographic diversification by providing
an immediate leadership position in Indiana, the fifth largest gaming
market in the United States, and by broadening our international presence
with additional interests in Canada, the Phillippines and South Africa,"
continued Mr. Goldberg.
"By acquiring the Caesars' brand name and related customer database, we
plan to heavily cross market between our destination resorts. This will
boost revenues and expand the markets where we operate."
"Furthermore, we expect this transaction to be accretive to earnings in the
first year and, given our track record in integrating casino operations, we
should achieve significant synergies leading to additional profits. We
also pick-up strategically located, undeveloped land parcels in Atlantic
City and Las Vegas that can be used for future development," said Mr.
Goldberg.
Barry S. Sternlicht, chairman and chief executive of Starwood said, "Over
the past several months, it became increasingly clear that it would be best
for our company to focus on our core global hotel business. The volatility
of the high end of the gaming business and the requirements of the business
for major ongoing capital investment were key to our decisions to sell
Caesars, which remains the most recognized name in the gaming industry. We
are very pleased that we could come to an agreement with a world class
owner/operator like Park Place Entertainment headed by Arthur Goldberg at a
price that makes the transaction EPS accretive for Starwood."
"We will use the proceeds of the transaction to pay down debt, strengthen
our balance sheet and significantly reduce our cost of financing. As a
result, we expect our debt rating to improve to investment grade," Mr.
Sternlicht said.
"With the sale of our gaming business, we will have sold approximately $6
billion of assets since February of 1998. This represents a significant
portion of the total price we paid for ITT and we continue to own ITT's
crown jewels - the Sheraton, St. Regis/Luxury Collection, CIGA and Four
Points by Sheraton hotel brands - nearly 500 hotel properties with more
than 140,000 rooms," Mr. Sterlicht said.
Starwood, through its subsidiaries, operates the St. Regis/Luxury
Collection, Westin, Sheraton, Four Points and W brands, and is one of the
leading hotel companies in the world, with more than 700 hotels in 72
countries and approximately 130,000 employees.
Park Place was created on December 31, 1998 through the tax-free
distribution of Hilton Hotels Corporation's gaming division to its
shareholders and the subsequent merger with Grand Casinos, Inc. Park Place
is the only casino gaming company with a leading presence in Nevada, New
Jersey, and Mississippi - the three largest gaming markets in the United
States.
Upon completion of the transaction, Park Place will have interests in 29
gaming properties located throughout the United States and around the world
with nearly 2 million square feet of gaming space and approximately 28,000
hotel rooms.
Note: This press release contains" forward-looking statements" within the
meaning of federal securities law, including statements concerning business
strategies and their intended results, and similar statements concerning
anticipated future events and expectations that are not historical facts.
The forward-looking statements in this press release are subject to
numerous risks and uncertainties, which could cause actual results to
differ materially from those expressed in or implied by the statements
herein. Additional information concerning potential factors that could
affect future financial results is included in the both Company's Annual
Reports on Form 10-K for the year ended December 31, 1998.
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