<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
WESTIN HOTELS LIMITED PARTNERSHIP
(Name of Subject Company)
WESTIN HOTELS LIMITED PARTNERSHIP
(Name(s) of Person(s) Filing Statement)
Units of Limited Partnership Interests
(Title of Class of Securities)
Not Applicable
(CUSIP Number of Class of Securities)
Alan M. Schnaid, Vice President
Westin Realty Corp.
c/o Starwood Hotels & Resorts Worldwide, Inc.
2231 E. Camelback Road, Suite 400
Phoenix, AZ 85016-3435
(888) 323-5888
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of the
persons filing statement)
With a copy to:
Jonathan Yellen, Esq.
Vice President, Associate General Counsel
Starwood Hotels & Resorts Worldwide, Inc.
777 Westchester Ave.
White Plains, NY 10604
(914) 640-8100
<PAGE> 2
Item 1. Security and Subject Company
The name of the subject company is Westin Hotels Limited Partnership, a
Delaware limited partnership (the "Partnership"). Westin Realty Corp., a
Delaware corporation, is the general partner of the Partnership (the "General
Partner"). The principal executive offices of the Partnership and the General
Partner are located at 2231 E. Camelback Road, Suite 400, Phoenix, AZ
85016-3435. The title of the class of equity securities to which this statement
relates is the units of limited partnership interest of the Partnership (the
"Units").
Item 2. Tender Offer of the Bidder
This statement relates to a tender offer by Kalmia Investors, LLC, a
Delaware limited liability company ("Purchaser"), disclosed in a Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1"), dated December 16, 1998, to
purchase up to 6,500 Units at a purchase price equal to $1,000 per Unit, without
interest, less the amount of any distributions declared or made with respect to
the Units after December 15, 1998 until January 18, 1999 or such other date to
which this Offer may be extended, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated December 16, 1998 and the related
Letter of Transmittal (the "Offer to Purchase").
Based on the information in the Schedule 14D-1, the business address of
the person authorized to receive notices and communications on behalf of the
Purchaser is Arlen Capital, LLC, Don Augustine, Manager, 1650 Hotel Circle
North, Suite 200, San Diego, CA 92108 (the "Depositary").
Item 3. Identity and Background
(a) The name and address of the Partnership, which is the person filing
this Statement, is set forth in Item 1 above.
(b) There is no material contract, agreement, arrangement or understanding
or any material actual or potential conflict of interest between: (i) the
Partnership and the General Partner; (ii) the Partnership and the Purchaser; or
(iii) the General Partner and the Purchaser. The General Partner is entitled to
receive distributions of the Partnership's operating cash flow and net sale or
refinancing proceeds, which amounts are subordinated to certain preferential
returns due the limited partners of the Partnership (the "Limited Partners"), as
outlined in the Partnership's Amended and Restated Limited Partnership
Agreement, as amended to date (the "Agreement"). In addition, an affiliate of
the General Partner is compensated for providing hotel management services to
the Partnership and holds a subordinated note in the aggregate principal amount
of $25,000,000, which accrues interest at an annual rate of prime plus 1% (9.5%
at December 31, 1997) and is payable in full upon the earlier of a sale or
refinancing of the Hotels or June 2, 2009. Accrued interest at September 30,
1998 was approximately $11,227,000. The Partnership paid this affiliate of the
General Partner approximately $10,145,000 for the year ended December 31, 1997
and approximately $5,718,000 for the nine months ended September 30, 1998, for
hotel management services, pursuant to the terms of the Agreement. In addition,
the Partnership had accrued approximately $22,281,000 for the year ended
December 31, 1997 and approximately $24,627,000 for the nine months ended
September 30, 1998, as incentive management fees pursuant to the terms of the
Agreement, which fees are payable, upon the sale refinancing of the Hotels.
Item 4. The Solicitation or Recommendation
(a) Recommendation of the General Partner. The Partnership is not
expressing an opinion and is remaining neutral towards the Offer to Purchase.
(b) Background, Reasons for Recommendation. The General Partner has
decided to remain neutral on the Offer to Purchase for the following reasons:
(1) the tender offer represents a per Unit purchase price higher than any other
previous tender offers or price reported or otherwise known to the Partnership;
and (2) since the General Partner is still in the preliminary stages of
exploring the possible sale of one or more of the Hotels, it is unable to
determine whether the tender offer price would be more or less than the per Unit
cash proceeds a Unit holder would receive on any sale of the Hotels.
2
<PAGE> 3
Item 5. Persons Retained, Employed or to Be Compensated
None.
Item 6. Recent Transactions and Intent with Respect to Securities
(a) None.
(b) Not applicable.
Item 7. Certain Negotiations and Transactions of the Subject Company
(a) The Partnership has not engaged in any negotiation in response to the
Offer to Purchase which relates to or would result in: (i) an extraordinary
transaction, such as a merger or reorganization, involving the Partnership; (ii)
a purchase, sale or transfer of a material amount of assets by the Partnership;
(iii) a tender offer for or other acquisition of securities by or of the
Partnership; (iv) any material change in the present capitalization or dividend
policy of the Partnership.
As described in Item 4 of this Statement, the General Partner, on
behalf of the Partnership, is exploring the possible sale of the Hotels. The
preliminary stages will include property valuation, market assessment and broker
selection. As of the date of this report, however, the General Partner has not
completed any such property valuation, market assessment or broker selection and
has not received any bids for either of the Hotels.
(b) There are no transactions, resolutions, agreements in principle or
signed contracts in response to the Offer to Purchase that relate to or would
result in one or more of the events referred to in Item 7(a).
Item 8. Additional Information to Be Furnished
None.
Item 9. Materials to Be Filed as Exhibits
(a)(1) Letter to Limited Partners
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
December 30, 1998
WESTIN HOTELS LIMITED PARTNERSHIP
By: Westin Realty Corp.,
its General Partner
By: Alan M. Schnaid,
Vice President
3
