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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
September 8, 1998
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Date of report (Date of Earliest Event Reported)
EQUITY INNS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Tennessee O-23290 62-1550848
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(State or Other Jurisdiction of (Commission File No.) (I.R.S. Employer
of Incorporation) Identification No.)
4735 Spottswood
Suite 102
Memphis, Tennessee 38117
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(Address of Principal Executive Offices) (Zip Code)
(901) 761-9651
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On September 8, 1998, Equity Inns, Inc. (the "Company") and RFS Hotel
Investors, Inc. ("RFS") announced the termination of the Asset Sale Agreement
and Plans of Mergers dated as of April 21, 1998 (the "Merger Agreement") by and
among the Company, RFS, RHI Acquisition, Inc., RFS Partnership, L.P. and Equity
Inns Partnership, L.P.
ITEM 7. EXHIBITS.
99.1 Press Release, dated September 8, 1998, of Equity Inns, Inc.
99.2 Termination Agreement, dated as of September 8, 1998, by and among RFS
Hotel Investors, Inc., Equity Inns, Inc., RHI Acquisition, Inc., Equity
Inns Partnership, L.P. and RFS Partnership, L.P.
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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.
EQUITY INNS, INC.
September 11, 1998 By: /s/ Donald H. Dempsey
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Donald H. Dempsey
Executive Vice President,
Secretary, Treasurer and
Chief Financial Officer
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EXHIBIT INDEX
99.1 Press Release, dated September 8, 1998, of Equity Inns, Inc.
99.2 Termination Agreement, dated as of September 8, 1998, by and among RFS
Hotel Investors, Inc., Equity Inns, Inc., RHI Acquisition, Inc., Equity
Inns Partnership, L.P. and RFS Partnership, L.P.
EXHIBIT 99.1
PRESS RELEASE
EQUITY INNS AND RFS HOTEL INVESTORS CANCEL MERGER PLANS
MEMPHIS, TN, September 8, 1998 - Equity Inns, Inc. (NYSE:ENN) and RFS Hotel
Investors, Inc. (NYSE:RFS) today announced that their respective boards of
Directors have voted to terminate the merger agreement between the two
companies. The two companies had signed a definitive agreement in April to merge
in a stock transaction where each share of RFS would be exchanged for 1.5 shares
of Equity Inns.
The Company noted a number of factors that converged to change the parameters of
the transaction, resulting in the merger not being in the best interest of
Equity Inns' shareholders. The anticipated sale of the existing RFS leases, a
key element of the transaction, could not be completed under acceptable
conditions. In addition, the additional debt incurred in order to complete the
transaction was more expensive than originally anticipated due to changing
market conditions.
Equity Inns' Chairman and CEO Phillip H. McNeill, Sr. said, "The strong
strategic fit we identified when we entered this agreement has not changed.
However, the completion of any transaction is a dynamic process, and changing
market conditions and the inability to put together key components of the deal
could not be overcome.
Our Company entertained other approaches than the sale of existing RFS leases,
including the formation of a separate (paper clipped) company to lease and
manage the hotels, but we determined that this approach would not enhance
overall value for ENN shareholders."
Mr. McNeill concluded, "Today's announcement in no way changes the fundamental
strategy of Equity Inns which led to our discussions with RFS in the first
place. We will continue to diversify our portfolio both by segment and
geography, increasing our presence in the premium extended stay and all suite
markets with high barriers to entry. At the same time, we will prune our
portfolio by selling smaller hotels located in secondary and tertiary markets -
assets that do not match Equity Inns' current target market."
Memphis-based Equity Inns, Inc. is a self-advised REIT that focuses on the
upscale extended stay, all suite and premium limited-service segments of the
hotel industry. With the settlement of previously announced acquisitions, the
Company will own 107 hotels with over 13,700 rooms located in 36 states.
Certain matters within this press release are discussed using forward-looking
language as specified in the 1995 Private Securities Litigation Reform Law, and,
as such, may involve known and unknown risks, uncertainties and other factors
that may cause the actual results or performance to differ from those projected
in the forward-looking statement. From time to time, these risks are discussed
in the Company's filings with the Securities and Exchange Commission.
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EXHIBIT 99.2
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT is made as of this 8th day of September, 1998 (this
"Termination Agreement") by and among RFS HOTEL INVESTORS, INC., a Tennessee
corporation ("Target REIT"), EQUITY INNS, INC., a Tennessee corporation
("Acquiror REIT"), RHI ACQUISITION, INC., a Tennessee corporation and
wholly-owned subsidiary of Acquiror REIT ("Merger Sub"), EQUITY INNS
PARTNERSHIP, L.P., a Tennessee limited partnership ("Acquiror OP"), and RFS
PARTNERSHIP, L.P., a Tennessee limited partnership ("Contributor OP").
RECITALS
I. The parties have entered into the Asset Sale Agreement and Plans of
Mergers dated as of the 21st day of April, 1998 (the "Agreement").
II. Pursuant to Section 11.1 of the Agreement, the Agreement may be
terminated by the mutual written consent of Acquiror REIT and Target
REIT.
III. Acquiror REIT and Target REIT mutually desire to terminate the
Agreement as set forth herein and the other parties to the Agreement
desire to join in such termination and in the agreements set forth
herein.
NOW, THEREFORE, in consideration of the Recitals and of the mutual covenants,
conditions and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed that:
A. The Agreement is hereby terminated effective as of the date
hereof.
B. Notwithstanding any provision of Article XI or any other
provision of the Agreement, the parties hereby agree that:
1. Target REIT and Contributor OP shall have no
liability or obligation to pay or make any
reimbursement to Acquiror REIT, Acquiror OP or Merger
Sub or any of their respective affiliates,
shareholders, officers, directors, employees or
agents with respect to any liabilities, claims, costs
or expenses incurred by Target REIT or Contributor OP
in connection with the transactions completed by the
Agreement or as a result of this Termination
Agreement.
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2. Acquiror REIT, Acquiror OP and Merger Sub shall have
no liability or obligation to pay or make any
reimbursement to Target REIT or Contributor OP or any
of their respective affiliates, shareholders,
officers, directors, employees or agents with respect
to any liabilities, claims, costs or expenses
incurred by them in connection with the transactions
contemplated by the Agreement or as a result of this
Termination Agreement.
C. Notwithstanding any provision of Article XI or any other
provision of the Agreement, no party shall be liable to any
other party for any Termination Fee (as defined in the
Agreement) or any similar fee, payment or reimbursement as a
result of the termination of the Agreement.
D. Target REIT and Acquiror REIT agree not to make any public
announcement or press release with respect to the termination
of the Agreement and this Termination Agreement without first
offering the other the opportunity to review and comment on
any such announcement or release.
E. The confidentiality provisions of Section 12.5 of the
Agreement shall survive the termination of the Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be duly executed on
its behalf as of the day and year first above written.
TARGET REIT:
RFS HOTEL INVESTORS, INC.
By: /s/ Robert M. Solmson
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Name: Robert M. Solmson
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Title: Chairman
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CONTRIBUTOR OP:
RFS PARTNERSHIP, L.P.
By: RFS Hotel Investors, Inc.,
General Partner
By: /s/ Robert M. Solmson
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Name: Robert M. Solmson
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Title: Chairman
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ACQUIROR REIT:
EQUITY INNS, INC.
By: /s/ Howard A. Silver
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Name: Howard A. Silver
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Title: President
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MERGER SUB, INC.:
RHI ACQUISITION, INC.
By: /s/ Phillip H. McNeill, Sr.
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Name: Phillip H. McNeill, Sr.
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Title: Chairman of the Board
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ACQUIROR OP:
EQUITY INNS PARTNERSHIP, L.P.
By: Equity Inns Trust,
General Partner
By: /s/ Howard A. Silver
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Name: Howard A. Silver
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Title: President
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