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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): JULY 19, 1999
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER: 1-7959
MARYLAND
(State or other jurisdiction of incorporation or organization)
52-1193298
(I.R.S. employer identification no.)
777 WESTCHESTER AVENUE
WHITE PLAINS, NEW YORK 10604
(Address of principal executive offices, including zip code)
(914) 640-8100
(Registrant's telephone number, including area code)
STARWOOD HOTELS & RESORTS
(Exact name of registrant as specified in its organizational documents)
COMMISSION FILE NUMBER: 1-6828
MARYLAND
(State or other jurisdiction of incorporation or organization)
52-0901263
(I.R.S. employer identification no.)
777 WESTCHESTER AVENUE
WHITE PLAINS, NEW YORK 10604
(Address of principal executive offices, including zip code)
(914) 640-8100
(Registrant's telephone number, including area code)
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ITEM 5: OTHER EVENTS
On July 19, 1999, Starwood Hotels & Resorts Worldwide, Inc., a Maryland
corporation ("Starwood"), and Fire Acquisition Corp., a Florida corporation and
a wholly owned subsidiary of Starwood ("Sub"), entered into a definitive merger
agreement (the "Merger Agreement") with Vistana, Inc., a Florida corporation
("Vistana"), pursuant to which Vistana will merge with and into Sub (the
"Merger") and thereby become a wholly-owned subsidiary of Starwood. Vistana's
principal operations include the acquisition, development and operation of
vacation ownership resorts, marketing and selling vacation ownership interests
in the resorts, and providing financing to customers who purchase such
interests. In 1998, Vistana had sales of approximately $234 million.
The Merger Agreement provides, subject to satisfaction or waiver of
certain conditions set forth therein, for each outstanding share of Vistana
common stock, par value $.01 per share, not owned by Starwood, Vistana or their
respective wholly-owned subsidiaries, to be converted in the Merger into $5.00
in cash and a fraction of a Starwood "Unit," consisting of one share of common
stock, par value $.01 per share, of Starwood and one class B share, par value
$.01 per share, of Starwood Hotels & Resorts, a subsidiary of Starwood, with
such fraction valued at $14.00 per share, assuming that Starwood's average share
price for the 20 trading day period immediately prior to the fifth trading day
preceding the date of the Merger is between $30-$36 per share. A portion of the
Starwood shares to be received by Vistana shareholders in the Merger is expected
to be tax-free to such shareholders.
The Merger, which is subject to customary closing conditions, including
the expiration or early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, has been approved by the
respective boards of directors of both Starwood and Vistana and has been
recommended by the independent directors of Vistana. The principal shareholders
of Vistana, who own more than 50% of the outstanding voting securities of
Vistana, have executed consents to approve the Merger and, accordingly, no
further action is required to be taken by the Vistana shareholders in connection
with the Merger Agreement.
Under certain circumstances either Starwood or Vistana may terminate
the Merger Agreement if the market price of Starwood shares is below $23 per
share. Additional information concerning the transaction and Vistana are set
forth in the press release attached as an exhibit hereto.
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ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Joint press release dated July 19, 1999, of Starwood and Vistana.
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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 thereunto duly authorized.
STARWOOD HOTELS & RESORTS STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
By: /s/ Ronald C. Brown By: /s/ Ronald C. Brown
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Name: Ronald C. Brown Name: Ronald C. Brown
Title: Executive Vice President Title: Vice President
Dated: July 21, 1999
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LIST OF EXHIBITS
EXHIBIT DESCRIPTION
99.1 Joint press release dated July 19, 1999, of Starwood and Vistana.
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EXHIBIT 99.1
CONTACT: JIM GALLAGHER (MEDIA) DAN GIBSON (INVESTORS) DAVID MATHESON
STARWOOD STARWOOD VISTANA
914-640-8194 914-640-8175 407-239-3155
FOR IMMEDIATE RELEASE
STARWOOD TO ACQUIRE VISTANA, INC.
WHITE PLAINS, NY AND ORLANDO, FL, JULY 19, 1999-- Starwood Hotels and
Resorts Worldwide, Inc. (NYSE: HOT), one of the world's largest hotel and
leisure companies, and Vistana, Inc. (NASDAQ: VSTN), one of the premier
developers and operators of high quality vacation ownership resorts, jointly
announced today they have entered into a definitive merger agreement pursuant to
which Vistana will become a wholly-owned subsidiary of Starwood.
The transaction is structured to provide Vistana's shareholders with
consideration valued at $19 per share, assuming that Starwood's average share
price for the twenty trading day period prior to the fifth day preceding the
closing date is between $30 and $36 per share. Based on the average closing
price of Starwood's shares of $30.17 for the equivalent trailing twenty trading
day period, Vistana's shareholders would receive total consideration valued at
$19 per share. The consideration to be paid will be comprised of $5 per share in
cash and the balance paid in Starwood stock. A portion of the stock
consideration is expected to be tax-free to Vistana's shareholders.
The transaction, which is subject to customary closing conditions
including federal antitrust review, has been approved by the Boards of both
companies and recommended by Vistana's independent directors and is expected to
close in the fourth quarter of 1999. The principal shareholders of Vistana, who
control more than 50 percent of the voting securities of the company, have
executed written consents to approve the transaction and no further action is
required on the part of the shareholders. Under certain circumstances, Starwood
or Vistana may terminate the merger agreement if the market price of Starwood's
stock is below $23.00 per share.
Raymond "Rip" Gellein, chairman and Co-CEO of Vistana and Jeff Adler,
president and Co-CEO, will head up Starwood's timeshare business upon the
closing of the transaction and will continue to work from Vistana's Orlando,
Florida headquarters. They are expected to report to Ted Darnall, President,
North American Hotel Operations for Starwood. Both of these key executives have
entered into new, multi-year employment agreements that will become effective
upon the closing.
"The vacation ownership industry is large and growing rapidly," said
Barry S. Sternlicht, chairman and chief executive officer of Starwood. "Vacation
ownership is a natural extension of our core lodging business. Indeed, many of
our premier owned resort assets such as the Phoenician, Westin La Paloma, Westin
Mission Hills, Westin Harbor Island, Sheraton Bal Harbour, Sheraton Key West and
St. Regis Aspen, as well as assets in Portugal, Sardinia and Malta have
significant excess land which we have targeted for interval ownership. In
addition, immediate access to Vistana's strong multi-site infrastructure and
superior management team
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STARWOOD TO ACQUIRE VISTANA, INC.
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will enable us to add a key strategic advantage when competing for new
management contracts for all of our brands on a global basis," Mr. Sternlicht
continued. "Linking interval owners with our Starwood Preferred Guest frequency
program reinforces and strengthens our global brands. Our customer databases
provide large pools of highly qualified potential interval owners. For more than
one year, we have analyzed numerous strategies and opportunities to enter this
key industry. We concluded that the acquisition of one of the premier companies
in the industry, Vistana, made the most sense to immediately enjoy expandable
infrastructure and generate near term EBITDA for us. Despite my great reluctance
to issue equity at the current trading price of our stock, the amount of equity
is small, it aligns the interests of Vistana's key executives and shareholders
with our shareholders and maintains financial flexibility and targeted lower
leverage levels which will be attained after the Caesars World and Desert Inn
dispositions. Moreover, the acquisition of Vistana is expected to be accretive
to earnings in 2000. While an initial focus will be to harvest the value of our
owned resort assets and complete the Desert Inn and Sun International's Atlantis
timeshare projects, we intend to utilize all of our brands on a global basis
focusing on building several price points for interval owners under primarily
the Sheraton, Westin and St. Regis brands," Mr. Sternlicht concluded.
"This transaction will allow us to accelerate our expansion plans and tap
into resources that few hospitality companies possess. We are extremely excited
about Starwood's brands, world-class resort assets, their rapidly expanding
Starwood Preferred Guest Program and the other numerous advantages a company of
Starwood's scale brings to the vacation ownership industry. We share Starwood's
vision to grow this segment of their business to become a major player in the
global timeshare industry," Messrs. Gellein and Adler added.
Vistana's principal operations include the acquisition, development and
operation of vacation ownership resorts, marketing and selling vacation
ownership interests (VOI's) in their resorts, and providing financing to
customers who purchase VOI's at their resorts. Founded in 1980, Vistana had 1998
sales of $234 million and has over 1,800 units in operation and an ownership
base of more than 86,000 VOI owners. The company currently operates ten resorts.
Four of these resorts are in Florida including the Vistana Resort in Orlando,
Hampton Vacation Resorts-Oak Plantation in Kissimmee, Vistana Resort at World
Golf Village near St. Augustine, and Vistana's Beach Club on Hutchison Island;
three in Colorado; Eagle Point in Vail and Falcon Point and Lakeside Terrace in
Avon; one in South Carolina, Embassy Vacation Resort at Myrtle Beach; and two in
Arizona, Villas of Cave Creek, north of Scottsdale and Embassy Vacation Resort
in Scottsdale.
In addition, Vistana has three new resorts planned: PGA Vacation Resort
by Vistana in Port St. Lucie, Florida; Harborside at Atlantis on Paradise Island
in the Bahamas as part of a proposed joint venture with Sun International
Hotels; and a large successor property to Vistana's flagship Vistana Resort in
Orlando. The company has several other projects currently under consideration.
Starwood, through its subsidiaries, owns, manages and franchises over
700 hotels and resorts in 72 countries with more than 223,000 rooms and 130,000
employees at its owned and managed properties.
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