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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
(800) 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
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
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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 February 1, 1999, to
purchase up to 4,900 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 March 2, 1999 or such other date to
which the offer may be extended, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated February 1, 1999 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, California 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. 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 such 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 equal to Purchaser's
previous tender offer and 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.
Item 5. Persons Retained, Employed or to Be Compensated
None.
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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, the General Partner has commissioned
an independent third party to begin an appraisal of the Hotels. The General
Partner, however, 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.
A. February 11, 1999
WESTIN HOTELS LIMITED PARTNERSHIP
By: Westin Realty Corp.,
its General Partner
/s/ Alan M. Schnaid
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By: Alan M. Schnaid,
Vice President
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Exhibit 99.A.1
February 11, 1998
Dear Limited Partners:
This letter is being sent in response to a new offer from Kalmia Investors
L.L.C. (Kalmia) to purchase your Units of Westin Hotels Limited Partnership for
$1,000 per Unit. The General Partner expresses no opinion and remains neutral
towards Kalmia's latest tender offer for the following reasons: (1) the tender
offer represents a per Unit purchase price equal to Kalmia's previous tender
offer and higher than any other previous tender offers or prices 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 is likely to be
more or less than the per Unit cash proceeds a Unit holder would receive on any
sale of the Hotels. To assist you, however, in considering whether or not to
accept this offer, we are providing you with the following information updates
and reminders:
POTENTIAL SALE OF THE HOTELS
As indicated in our letter to you dated November 23, 1998, we are evaluating the
possible sale of one or both of the Hotels. Our exploration of the possible sale
of the Hotels is still in the preliminary stages, which include property
valuation, market assessment and broker selection. As of the date of this
letter, the General Partner has commissioned an independent third party to begin
an appraisal of the Hotels. We, however, have not completed any such property
valuation, market assessment or broker selection, and we have received no bids
for either of the Hotels. Presently, we are unable to advise you whether or not
a sale of the Hotels would result in your receipt of cash proceeds in excess of
$1,000 per Unit.
CASH DISTRIBUTIONS
The General Partner anticipates that, as a result of increased cash flow from
the operations and barring any unforeseen circumstances, the Partnership will be
in a position to continue cash distributions to the limited partners at the
annual level of $95 per Unit in 1999. Per the terms of the Partnership
Agreement, the General Partner shall determine the amount of Net Cash Flow to be
distributed to the limited partners.
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Limited Partners
February 11, 1999
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5% SAFE-HARBOR
In 1996 the General Partner determined it to be in the best interest of the
Partnership to implement a Unit transfer policy that relies on the protections
of a 5% safe harbor to prevent the Partnership from being deemed a publicly
traded partnership pursuant to Section 7704 of the Internal Revenue Code.
Relying on the protections of this 5% safe harbor, the General Partner will,
when qualified sales of Partnership Units reach 6,848 in any one year, suspend
its approval of any Unit sale transfer requests for the remainder of that year.
This may restrict your ability to sell your Units. As of this date, the
Partnership has transfer requests totaling 6,848 pending approval for 1999 and
1,534 pending approval for 2000.
In its new offer, the Purchaser referenced a discussion with us about providing
a legal opinion on the transfer of Units that Purchaser acquired in its tender
offer. These discussions have been concluded and no opinion is expected.
OTHER CONSIDERATIONS
For those limited partners who have no current need for liquidity and expect to
retain their Units through an anticipated sale of the Hotels, the tender offer
may be inadequate and not in their best interests. For those limited partners
who have an immediate need for liquidity or who conclude that the risks of a
longer holding period are significant, however, the tender offer may indeed be
adequate and in their best interests.
Finally, selling your Units may have an impact on your federal income tax
liability. Therefore, we recommend that you consult with your tax advisor to
determine what this impact will be before selling your Units.
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Limited Partners
February 11, 1999
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In closing, as always any questions or concerns can be directed to the Investor
Relations Department at 1-800-323-5888.
Sincerely,
Westin Hotels Limited Partnership
By Westin Realty Corp.
/s/ Alan M. Schnaid
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By: Alan M. Schnaid,
Vice President
