SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 02549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 10, 1999
RED ROOF INNS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-14058 31-1393666
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
4355 Davidson Road, Hilliard, Ohio 43026
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code (614) 876-3200
Item 5. Other Items.
Filed hereto as Exhibit 99.1 is a joint press release issued on July
12, 1999 by Red Roof Inns, Inc. ("Red Roof") and Accor S.A. ("Accor")
announcing Accor's intention to launch a cash tender offer for all of the
issued and outstanding shares of common stock of Red Roof at a price of
$22.75 per share.
The foregoing is a summary only and is qualified in its entirety by
reference to the complete text of the Joint Press Release which is filed as
Exhibit 99.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits
(99.1) Joint Press Release of Red Roof Inns, Inc. and Accor S.A.,
dated July 12, 1999
SIGNATURES
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.
RED ROOF INNS, INC..
Dated: July 14, 1999 By: /s/ David L. Rea
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Name: David L. Rea
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
Index to Exhibits
Exhibit
Number Exhibit
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(99.1) Joint Press Release of Red Roof Inns, Inc. and Accor S.A.,
dated July 12, 1999
PRESS RELEASE
RED ROOF INNS, INC. TO BE ACQUIRED BY
ACCOR S.A.
ACCOR EXPANDS ITS WORLDWIDE
LEADERSHIP IN THE ECONOMY LODGING SEGMENT
AND ITS PRESENCE IN THE U.S. MARKET
Paris, France and Columbus, Ohio, USA
12 July 1999
Accor S.A. and Red Roof Inns, Inc. today jointly announced that Accor plans
to launch a tender offer to acquire all outstanding shares of economy
lodging company Red Roof Inns, Inc. at a price of $22.75 per share. The
total value of the transaction, including assumption of debt, is slightly
more than $1.1 billion.
Accor has received a commitment from the Morgan Stanley Real Estate Fund
L.P. and certain of its co-investors, the majority shareholders of the
Company, to tender their combined 68.3% stake at the offer price. The
offer price of $22.75 represents a premium of 27.5% over the 30-day average
trading price of $17.85 per share. Red Roof's revenues for 1998 amounted
to $375.3 million, and EBITDA was $146.5 million. The transaction value
represents a multiple of approximately 7.6 times 1998 EBITDA. The
acquisition is expected to be immediately accretive to Accor.
With a network of 322 hotels (37,005 rooms, of which 29,907 are owned and
the remainder franchised) primarily located in the Midwest, the East and in
the South, Red Roof Inns enjoys high customer awareness and an outstanding
brand image in the economy lodging market.
Motel 6 and Red Roof Inns complement each other particularly well, as is
the case for the Formule 1 and Etap Hotel chains in Europe. The two brands
complement each other in terms of geography (West and East), product mix
(Budget and Economy) and clientele (leisure and business).
To supplement the renewed image and performance of Motel 6 in recent years,
Accor plans to rapidly optimize the operations of Motel 6 and Red Roof Inns
through realization of synergies and acceleration of the development and
franchising program. Motel 6 and Red Roof Inns will both become part of a
newly formed group, Accor Economy Lodging.
Jean-Marc Espalioux, Chairman of the Management Board and CEO of Accor
stated, "The acquisition of Red Roof fits with one of the key elements of
Accor's global strategy, the strengthening of Accor's worldwide leadership
in the economy hotel sector. The economy sector is promising in both
developed and emerging nations, is highly profitable, and is less sensitive
to economic cycles than other hotel sectors. With its unparalleled
expertise, Accor will now operate 2,098 economy sector properties worldwide
with 207,686 rooms under the brands Formule 1, Etap Hotel, Ibis, Motel 6,
Studio 6 and Red Roof Inns, and reinforce its leading position on all
continents."
"This is a great opportunity for Red Roof Inns and offers our shareholders
the value that is representative of our company's strengths - - our people,
our service, and our brand," said Francis W. "Butch" Cash, Chairman of the
Board, President and Chief Executive Officer of Red Roof Inns. "The
synergy created by joining the Accor family will allow Red Roof Inns to
expand our strong brand positioning within a global marketplace."
Through Motel 6, Accor is already a leader in the U.S. budget and economy
lodging sector. With the addition of the Red Roof Inns portfolio to the
790 Motel 6 properties (85,375 rooms), Accor will operate more than 120,00
rooms in this sector in the United States.
In the United States, the world's largest hotel market, Accor also operates
through its upscale Novotel chain and growing luxury Sofitel chain, in
business travel through its 50% interest in Carlson Wagonlit Travel and in
corporate services through Child Care.
With the Red Roof acquisition, the portion of revenues generated in the
United States will increase from 17% to 22%.
Accor, a worldwide leader in travel, tourism and business services, is active
in 140 countries with 130,000 associates, through its four major complementary
activities: hotels (3,084 hotels, 340,782 rooms after addition of Red
Roof); travel agencies through Carlson Wagonlit Travel; car rental with
Europcar and corporate services with Accor Corporate Services.
The financial advisor for Accor was J.P. Morgan & Co. and for Red Roof Inns
was Morgan Stanley Dean Witter. The legal advisor for Accor was Proskauer
Rose LLP and for Red Roof Inns was Skadden, Arps, Slate, Meagher and Flom
LLP.
Accor Contacts
Jacques Charbit Marie-Claire Camus
Tel: 33 1 45 38 87 53 Tel: 33 1 45 38 84 85
Red Roof Inns Contacts
Gail B. Whitcomb Lisa K. Klinger
Media Inquiries Analyst Inquiries
614-876-3276 614-876-3227
