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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13E-3
Rule 13e-3 Transaction Statement
(Amendment No. 1)
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
SUNSTONE HOTEL INVESTORS, INC.
(Name of the Issuer)
SUNSTONE HOTEL INVESTORS, INC.
SHP ACQUISITION, L.L.C.
SHP INVESTORS SUB, INC.
ROBERT A. ALTER
ALTER SHP L.L.C.
CHARLES L. BIEDERMAN
BIEDERMAN SHP L.L.C.
WESTBROOK REAL ESTATE FUND III, L.P.
WESTBROOK REAL ESTATE CO-INVESTMENT PARTNERSHIP III, L.P.
WESTBROOK SHP, L.L.C.
PAUL D. KAZILIONIS
(Name of Person(s) Filing Statement)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
867933 10 3
(CUSIP Number of Class of Securities)
R. TERRENCE CROWLEY JONATHAN H. PAUL
SUNSTONE HOTEL INVESTORS, INC.903 SHP ACQUISITION, L.L.C.
CALLE AMANECER c/o WESTBROOK REAL ESTATE
SAN CLEMENTE, CALIFORNIA 92673 PARTNERS, L.L.C.
(949) 369-4230 599 LEXINGTON AVENUE
NEW YORK, NY 10022
(212) 849-8839
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of
Person(s) Filing Statement)
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------------------
Copies to:
LAURA HUNTER, ESQ. RICHARD CAPELOUTO, ESQ.
ROGER COHEN, ESQ. BRIAN M. STADLER, ESQ.
BROBECK, PHLEGER & HARRISON LLP SIMPSON THACHER & BARTLETT
38 TECHNOLOGY DRIVE 425 LEXINGTON AVENUE
IRVINE, CALIFORNIA 92618 NEW YORK, NEW YORK 10017
(949) 790-6300 (212) 455-2000
PHILLIP GORDON, ESQ. STEVEN L. LICHTENFELD, ESQ.
ALTHEIMER & GRAY BATTLE FOWLER LLP
10 SOUTH WACKER DRIVE 75 EAST 55/th/ STREET
CHICAGO, IL 60606 NEW YORK, NEW YORK 10021
(312) 715-4000 (212) 856-7000
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This statement is filed in connection with (check the appropriate box):
a. [x] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [x]
Calculation of Filing Fee
- -------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee
$438,874,389 $87,775
- -------------------------------------------------------------------------------
[x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
* For purposes of calculation of the filing fee only. This amount is based
upon a merger involving the cancellation of 39,757,386 shares of common
stock, par value $0.01, of Sunstone Hotel Investors, Inc. at $10.41 cash
per share and 250,000 shares of Preferred Stock of Sunstone Hotel
Investors, Inc. at $100.00 per share. Pursuant to, and as provided by,
Rule 0-11 under the Securities Exchange Act of 1934, as amended, the amount
required to be paid with the filing of this Schedule 13E-3 is $87,775.
Amount previously paid: $87,775 Filing Party: Sunstone Hotel
Investors, Inc.
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Form or registration No.: Preliminary Schedule 14A Date Filed: August 18,
1999
This Rule 13e-3 Transaction Statement on Schedule 13E-3 is being filed
jointly by Sunstone Hotel Investors, Inc., a Maryland corporation (the
"Company"), SHP Acquisition, L.L.C., a Delaware limited liability company ("SHP
Acquisition"), SHP Investors Sub, Inc., a Maryland corporation ("SHP Investors
Sub"), Robert A. Alter, Alter SHP L.L.C., a Delaware limited liability company,
Charles L. Biederman, Biederman SHP L.L.C., a Delaware limited liability
company, Westbrook Real Estate Fund III, L.P., a Delaware limited partnership,
Westbrook Real Estate Co-Investment Partnership III, L.P., a Delaware limited
partnership, Westbrook SHP, L.L.C., a Delaware limited liability company, and
Paul D. Kazilionis in connection with the proposed merger of SHP Investors Sub
with and into the Company (the "Merger"), pursuant to an Amended and Restated
Agreement and Plan of Merger, dated as of October 7, 1999 (the "Merger
Agreement"), by and among the Company, SHP Acquisition and SHP Investors
Sub.
Upon the effectiveness of the Merger (the "Effective Time"), each
share of common stock, par value $0.01 per share, of the Company issued and
outstanding immediately prior to the Effective Time will be converted into the
right to receive $10.35 in cash, as adjusted as provided in the Merger
Agreement, and each share of the Company's Class A Cumulative Convertible
Preferred Stock, $0.01 par value per share, issued and outstanding immediately
prior to the Effective Time, will be converted into the right to receive
$100.00, together with all accrued dividends, in cash.
This Schedule 13E-3 is being filed with the Securities and Exchange
Commission concurrently with a proxy statement filed by the Company pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Proxy
Statement"). A copy of the Proxy Statement is attached hereto as Exhibit 99.1.
The following cross reference sheet is being supplied pursuant to
General Instruction F to Schedule 13E-3 and shows the location in the Proxy
Statement of the information required to be included in this Schedule 13E-3. The
information contained in the Proxy Statement, including all appendices thereto,
is expressly incorporated herein by reference and the responses to each item are
qualified in their entirety by reference to the information contained in the
Proxy Statement and the appendices thereto. Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Proxy Statement.
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CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Item Number
and Caption in
Schedule 13E-3 Location in the Proxy Statement
- -------------- -------------------------------
<S> <C>
1. Issuer and Class
of Security Subject to
the Transaction
(a) "MATTERS RELATING TO THE MERGER PROPOSAL --GENERAL --
SUNSTONE"
(b) COVER PAGE, "SUMMARY -- VOTING SECURITIES AND VOTES
REQUIRED;" and "INFORMATION CONCERNING THE SPECIAL MEETING -
- RECORD DATE, QUORUM DATE; QUORUM; OUTSTANDING COMMON STOCK
AND PREFERRED STOCK ENTITLED TO VOTE"
(c) "COMMON STOCK MARKET PRICE INFORMATION; DIVIDEND
INFORMATION"
(d) "COMMON STOCK MARKET PRICE INFORMATION; DIVIDEND
INFORMATION"
(e) "COMMON STOCK MARKET PRICE INFORMATION; DIVIDEND
INFORMATION"
(f) *
</TABLE>
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2. Identity and
Background
<TABLE>
<CAPTION>
<S> <C>
(a) - (g) "SUMMARY;" "MATTERS RELATING TO THE MERGER PROPOSAL -- GENERAL --
SUNSTONE;" "MATTERS RELATING TO THE MERGER PROPOSAL -- GENERAL --
SHP ACQUISITION AND SHP INVESTORS SUB;" "MANAGEMENT OF SUNSTONE;"
and "MANAGEMENT OF SHP ACQUISITION AND SHP INVESTORS SUB; MEMBERS
OF SHP ACQUISITION"
3. Past Contacts,
Transactions or
Negotiations
(a)(1) "MATTERS RELATING TO THE MERGER PROPOSAL --BACKGROUND OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;"
and "CERTAIN RELATIONSHIPS AND TRANSACTIONS"
(a)(2) "MATTERS RELATING TO THE MERGER PROPOSAL --BACKGROUND OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PURPOSE
AND STRUCTURE OF THE MERGER;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- INTERESTS OF CERTAIN PERSONS IN MATTERS
TO BE ACTED UPON;" "CERTAIN RELATIONSHIPS AND TRANSACTIONS;"
and "SUMMARY -- OPERATING PARTNERSHIP MERGER"
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
(b) "MATTERS RELATING TO THE MERGER PROPOSAL --BACKGROUND OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;"
and "CERTAIN RELATIONSHIPS AND TRANSACTIONS"
4. Terms of the Transaction
(a) "SUMMARY;" "MATTERS RELATING TO THE MERGER PROPOSAL;" and
"THE MERGER AND THE MERGER AGREEMENT -- THE MERGER"
(b) "SUMMARY;" "MATTERS RELATING TO THE MERGER PROPOSAL;" and
"THE MERGER AND THE MERGER AGREEMENT -- THE MERGER"
5. Plans or Proposals of the
Issuer or Affiliate
(a) - (g) "SUMMARY -- OPERATING PARTNERSHIP MERGER;" "MATTERS RELATING TO
THE MERGER PROPOSAL -- PURPOSE AND STRUCTURE OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL -- INTERESTS OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- CERTAIN CONSEQUENCES OF THE MERGER;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- PLANS FOR SUNSTONE AFTER THE
MERGER;" "THE MERGER AND THE MERGER AGREEMENT -- THE MERGER;"
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
"MATTERS RELATING TO THE MERGER PROPOSAL --FINANCING;
SOURCE OF FUNDS;" and "COMMON STOCK MARKET PRICE
INFORMATION; DIVIDEND INFORMATION"
6. Source and Amount of
Funds or Other Consideration
(a) - (c) "SUMMARY -- FAIRNESS OPINION;" "SUMMARY--FINANCING;
SOURCE OF FUNDS;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- FINANCING; SOURCE OF FUNDS;" and
"MATTERS RELATING TO THE MERGER PROPOSAL --FEES AND
EXPENSES"
(d) *
7. Purpose(s), Alternatives,
Reasons and Effects
(a) - (c) "SUMMARY -- PURPOSE, STRUCTURE AND EFFECTS OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE
MERGER PROPOSAL --PURPOSE AND STRUCTURE OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
BENEFITS AND DETRIMENTS OF THE MERGER TO SHP
ACQUISITION;" "MATTERS RELATING TO THE MERGER
PROPOSAL --RECOMMENDATION OF THE SPECIAL COMMITTEE
OF THE BOARD OF DIRECTORS; FAIRNESS OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL -- OPINION
OF THE INDEPENDENT FINANCIAL ADVISOR;" and "MATTERS
RELATING TO THE
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
MERGER PROPOSAL -- POSITION OF SHP
ACQUISITION AND THE OTHER FILING PERSONS"
(d) "SUMMARY-- PURPOSE, STRUCTURE AND EFFECTS OF THE
MERGER;" "SUMMARY-- CONFLICTS OF INTEREST OF
OFFICERS AND DIRECTORS OF SUNSTONE;" "SUMMARY--
FEDERAL INCOME TAX CONSEQUENCES;" "MATTERS RELATING
TO THE MERGER PROPOSAL --PURPOSE AND STRUCTURE OF
THE MERGER;" "MATTERS RELATING TO THE MERGER
PROPOSAL --BENEFITS AND DETRIMENTS OF THE MERGER TO
SHP ACQUISITION;" "MATTERS RELATING TO THE MERGER
PROPOSAL --RECOMMENDATION OF THE SPECIAL COMMITTEE
OF THE BOARD OF DIRECTORS; FAIRNESS OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL -- BENEFITS
AND DETRIMENTS TO NONAFFILIATED STOCKHOLDERS;"
"MATTERS RELATING TO THE MERGER PROPOSAL --INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;"
"MATTERS RELATING TO THE MERGER PROPOSAL --CERTAIN
CONSEQUENCES OF THE MERGER;" "MATTERS RELATING TO
THE MERGER PROPOSAL -- PLANS FOR SUNSTONE AFTER THE
MERGER;"
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
"MATTERS RELATING TO THE MERGER PROPOSAL --
MATERIAL FEDERAL INCOME TAX CONSEQUENCES;"
"MATTERS RELATING TO THE MERGER PROPOSAL--
LITIGATION REGARDING THE MERGER;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- ACCOUNTING
TREATMENT;" and "THE MERGER AND THE MERGER
AGREEMENT -- THE MERGER"
8. Fairness of the
Transaction
(a) - (f) "SUMMARY -- RECOMMENDATION OF THE BOARD OF DIRECTORS
AND THE SPECIAL COMMITTEE;" "INFORMATION CONCERNING
THE SPECIAL MEETING --VOTE REQUIRED;" "MATTERS
RELATING TO THE MERGER PROPOSAL --BACKGROUND OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
PURPOSE AND STRUCTURE OF THE MERGER;" "MATTERS
RELATING TO THE MERGER PROPOSAL --RECOMMENDATION OF
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS;
FAIRNESS OF THE MERGER;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- POSITION OF SHP ACQUISITION AND
THE OTHER FILING PERSONS;" "MATTERS RELATING TO THE
MERGER PROPOSAL --BENEFITS AND DETRIMENTS TO
NONAFFILIATED STOCKHOLDERS;" "MATTERS RELATING TO
THE MERGER PROPOSAL -- OPINION OF THE INDEPENDENT
FINANCIAL
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ADVISOR;" "MATTERS RELATING TO THE MERGER PROPOSAL --
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED
UPON; "APPENDIX B -- FAIRNESS OPINION OF GOLDMAN,
SACHS & CO. DATED JULY 12, 1999;" AND APPENDIX C
-- FAIRNESS OPINION OF GOLDMAN SACHS & CO. DATED
OCTOBER 7, 1999"
9. Reports, Opinions,
Appraisals and Certain
Negotiations
(a) - (c) "MATTERS RELATING TO THE MERGER PROPOSAL --
BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE
MERGER PROPOSAL --RECOMMENDATION OF THE SPECIAL
COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF THE
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
OPINION OF THE INDEPENDENT FINANCIAL ADVISOR;"
"APPENDIX B -- FAIRNESS OPINION OF GOLDMAN, SACHS &
CO. DATED JULY 12, 1999;" AND APPENDIX C
-- FAIRNESS OPINION OF GOLDMAN SACHS & CO. DATED
OCTOBER 7, 1999"
10. Interest in Securities
of the Issuer
(a) "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF SUNSTONE"
(b) "COMMON STOCK MARKET PRICE INFORMATION; DIVIDEND
INFORMATION"
11. Contracts, Arrangements
or Understanding with
Respect to the Issuer's
Securities
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
"SUMMARY;" "INFORMATION CONCERNING THE SPECIAL
MEETING -- VOTE REQUIRED;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- INTERESTS OF CERTAIN PERSONS IN
MATTERS TO BE ACTED UPON;" "THE MERGER AND THE
MERGER AGREEMENT --THE MERGER;" and "CERTAIN
RELATIONSHIPS AND TRANSACTIONS"
12. Present Intention and
Recommendation of Certain
Persons with Regard to the
Transaction
(a) - (b) "SUMMARY;" "INFORMATION CONCERNING THE SPECIAL
MEETING -- VOTE REQUIRED;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- BACKGROUND OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL --PURPOSE
AND STRUCTURE OF THE MERGER;" "MATTERS RELATING TO
THE MERGER PROPOSAL -- RECOMMENDATION OF THE SPECIAL
COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF THE
MERGER;" "CERTAIN RELATIONSHIPS AND TRANSACTIONS;"
and "MATTERS RELATING TO THE MERGER PROPOSAL --
POSITION OF SHP ACQUISITION AND THE OTHER FILING
PERSONS"
13. Other Provisions of
the Transaction
(a) "MATTERS RELATING TO THE MERGER PROPOSAL --APPRAISAL
RIGHTS"
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(b) *
(c) *
14. Financial Information
(a) "SELECTED FINANCIAL DATA OF SUNSTONE AND LESSEE"
(b) *
15. Persons and Assets
Employed, Retained or
Utilized
(a) "INFORMATION CONCERNING THE SPECIAL MEETING --PROXY
SOLICITATION;" "MATTERS RELATING TO THE MERGER
PROPOSAL --BACKGROUND OF THE MERGER;" "MATTERS
RELATING TO THE MERGER PROPOSAL --PLANS FOR SUNSTONE
AFTER THE MERGER;" and "CERTAIN RELATIONSHIPS AND
TRANSACTIONS"
(b) "INFORMATION CONCERNING THE SPECIAL MEETING --PROXY
SOLICITATION;" "MATTERS RELATING TO THE MERGER
PROPOSAL --OPINION OF THE INDEPENDENT FINANCIAL
ADVISOR;" "MATTERS RELATING TO THE MERGER PROPOSAL --
FEES AND EXPENSES;" "APPENDIX B -- FAIRNESS OPINION
OF GOLDMAN, SACHS & CO., DATED JULY 12, 1999;" AND
"APPENDIX C -- FAIRNESS OPINION OF GOLDMAN, SACHS &
CO., DATED OCTOBER 7, 1999"
16. Additional Information
The Proxy Statement, including the Appendices
thereto
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
17. Material to be Filed as
Exhibits
<S> <C>
(a) - (f) Separately filed with this Schedule 13E-3
</TABLE>
* The Item is inapplicable or the answer thereto is in the negative.
<PAGE>
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The information set forth in "MATTERS RELATING TO THE MERGER PROPOSAL
- -- GENERAL -- SUNSTONE" in the Proxy Statement is hereby incorporated herein by
reference.
(b) The information set forth on the Cover Page of the Proxy Statement and
in "SUMMARY -- VOTING SECURITIES AND VOTES REQUIRED;" and "INFORMATION
CONCERNING THE SPECIAL MEETING -- Record Date; Quorum; Outstanding Common Stock
and Preferred Stock Entitled to Vote" in the Proxy Statement is hereby
incorporated herein by reference.
(c) The information set forth in "COMMON STOCK MARKET PRICE INFORMATION;
DIVIDEND INFORMATION" in the Proxy Statement is hereby incorporated herein by
reference.
(d) The information set forth in "COMMON STOCK MARKET PRICE INFORMATION;
DIVIDEND INFORMATION" in the Proxy Statement is hereby incorporated herein by
reference.
(e) The information set forth in "COMMON STOCK MARKET PRICE INFORMATION;
DIVIDEND INFORMATION" in the Proxy Statement is hereby incorporated herein by
reference.
(f) Not applicable.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13E-3 is being filed by the Company, SHP Acquisition, SHP
Investors Sub, Robert A. Alter, Alter SHP L.L.C., Charles L. Biederman,
Biederman SHP L.L.C., Westbrook Real Estate Fund III, L.P., Westbrook Real
Estate Co-Investment Partnership III, L.P., Westbrook SHP, L.L.C. and Paul D.
Kazilionis. The Company is the issuer of the Common Stock which is the subject
of the Rule 13e-3 transaction. The information set forth in "SUMMARY;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- GENERAL -- SHP ACQUISITION AND SHP INVESTORS
SUB;" "MANAGEMENT OF SUNSTONE;" and "MANAGEMENT OF SHP ACQUISITION AND SHP
INVESTORS SUB; MEMBERS OF SHP ACQUISITION" in the Proxy Statement is hereby
incorporated herein by reference.
<PAGE>
During the last five years, none of the Company, SHP Acquisition SHP
Investors Sub, Robert A. Alter, Alter SHP L.L.C., Charles L. Biederman,
Biederman SHP L.L.C., Westbrook Real Estate Fund III, L.P., Westbrook Real
Estate Co-Investment Partnership III, L.P., Westbrook SHP, L.L.C. or Paul D.
Kazilionis nor any person controlling SHP Acquisition or SHP Investors Sub, nor,
to the best of their knowledge, any of the persons set forth in "MANAGEMENT OF
SUNSTONE" and "MANAGEMENT OF SHP ACQUISITION AND SHP INVESTORS SUB; MEMBERS OF
SHP ACQUISITION" in the Proxy Statement has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining further violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) (1) The information set forth in "MATTERS RELATING TO THE MERGER
PROPOSAL -- BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL
- -- INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;" and "CERTAIN
RELATIONSHIPS AND TRANSACTIONS" in the Proxy Statement is hereby incorporated
herein by reference.
(a) (2) The information set forth in "MATTERS RELATING TO THE MERGER
PROPOSAL -- BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL
- -- PURPOSE AND STRUCTURE OF THE MERGER;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;" "CERTAIN
RELATIONSHIPS AND TRANSACTIONS;" and "SUMMARY -- OPERATING PARTNERSHIP MERGER"
in the Proxy Statement is hereby incorporated herein by reference.
(b) The information set forth in "MATTERS RELATING TO THE MERGER PROPOSAL
- -- BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;" and "CERTAIN
RELATIONSHIPS AND TRANSACTIONS" in the Proxy Statement is hereby incorporated
herein by reference.
<PAGE>
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in "SUMMARY;" "MATTERS RELATING TO THE
MERGER PROPOSAL;" and "THE MERGER AND THE MERGER AGREEMENT -- THE MERGER" in the
Proxy Statement is hereby incorporated herein by reference.
(b) The information set forth in "SUMMARY;" "MATTERS RELATING TO THE
MERGER PROPOSAL;" and "THE MERGER AND THE MERGER AGREEMENT -- THE MERGER" in the
Proxy Statement is hereby incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a) - (g) The information set forth in "SUMMARY -- OPERATING PARTNERSHIP
MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PURPOSE AND STRUCTURE OF
THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- INTERESTS OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON;" "MATTERS RELATING TO THE MERGER PROPOSAL -
- - CERTAIN CONSEQUENCES OF THE MERGER;" "THE MERGER AND THE MERGER AGREEMENT --
THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PLANS FOR SUNSTONE
AFTER THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --FINANCING; SOURCE
OF FUNDS;" and "COMMON STOCK MARKET PRICE INFORMATION; DIVIDEND INFORMATION" in
the Proxy Statement is hereby incorporated herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) - (c) The information set forth in "SUMMARY -- FAIRNESS OPINION;"
"SUMMARY --FINANCING; SOURCE OF FUNDS;" "MATTERS RELATING TO THE MERGER PROPOSAL
- -- FINANCING; SOURCE OF FUNDS;" and "MATTERS RELATING TO THE MERGER PROPOSAL --
FEES AND EXPENSES" in the Proxy Statement is hereby incorporated herein by
reference.
<PAGE>
(d) Not Applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) - (c) The information set forth in "SUMMARY -- PURPOSE, STRUCTURE AND
EFFECTS OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --BACKGROUND OF
THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PURPOSE AND STRUCTURE
OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- RECOMMENDATION OF
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL -- OPINION OF THE INDEPENDENT FINANCIAL
ADVISOR;" and "MATTERS RELATING TO THE MERGER PROPOSAL --POSITION OF SHP
ACQUISITION AND THE OTHER FILING PERSONS" in the Proxy Statement is hereby
incorporated herein by reference.
(d) The information set forth in "SUMMARY -- PURPOSE, STRUCTURE AND
EFFECTS OF THE MERGER;" "SUMMARY -- CONFLICTS OF INTEREST OF OFFICERS AND
DIRECTORS OF SUNSTONE;" "SUMMARY -- FEDERAL INCOME TAX CONSEQUENCES;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- PURPOSE AND STRUCTURE OF THE MERGER;"
"MATTERS RELATING TO THE MERGER PROPOSAL --RECOMMENDATION OF THE SPECIAL
COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF THE MERGER;" "MATTERS RELATING
TO THE MERGER PROPOSAL -- BENEFITS AND DETRIMENTS TO NONAFFILIATED
STOCKHOLDERS;" "MATTERS RELATING TO THE MERGER PROPOSAL -- INTERESTS OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- CERTAIN CONSEQUENCES OF THE MERGER;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- PLANS FOR SUNSTONE AFTER THE MERGER;" "MATTERS RELATING TO THE
MERGER PROPOSAL -- MATERIAL FEDERAL INCOME TAX CONSEQUENCES;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- LITIGATION
<PAGE>
REGARDING THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- ACCOUNTING
TREATMENT;" and "THE MERGER AND THE MERGER AGREEMENT -- THE MERGER" in the Proxy
Statement is hereby incorporated herein by reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) - (f) The information set forth in "SUMMARY - RECOMMENDATION OF THE
BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE;" "INFORMATION CONCERNING THE
SPECIAL MEETING -- VOTE REQUIRED;" "MATTERS RELATING TO THE MERGER PROPOSAL --
BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PURPOSE
AND STRUCTURE OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
RECOMMENDATION OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF
THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --POSITION OF SHP
ACQUISITION AND THE OTHER FILING PERSONS;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- BENEFITS AND DETRIMENTS TO NONAFFILIATED STOCKHOLDERS;" "MATTERS
RELATING TO THE MERGER PROPOSAL -- OPINION OF THE INDEPENDENT FINANCIAL
ADVISOR;" "MATTERS RELATING TO THE MERGER PROPOSAL -- INTERESTS OF CERTAIN
PERSONS IN MATTERS TO BE ACTED UPON;" "APPENDIX B -- FAIRNESS OPINION OF
GOLDMAN, SACHS & CO., DATED JULY 12, 1999;" and "APPENDIX C -- FAIRNESS OPINION
OF GOLDMAN, SACHS & CO., DATED OCTOBER 7, 1999" in the Proxy Statement is hereby
incorporated herein by reference.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) - (c) The information set forth in "MATTERS RELATING TO THE MERGER
PROPOSAL -- BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL
- -- RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS; FAIRNESS
OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- OPINION OF THE
INDEPENDENT FINANCIAL ADVISOR;" "APPENDIX B -- FAIRNESS OPINION OF
<PAGE>
GOLDMAN, SACHS & CO., DATED JULY 12, 1999;" and "APPENDIX C -- FAIRNESS OPINION
OF GOLDMAN, SACHS & CO., DATED OCTOBER 7, 1999" in the Proxy Statement is hereby
incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT OF SUNSTONE" in the Proxy Statement is hereby incorporated
herein by reference.
(b) The information set forth in "COMMON STOCK MARKET PRICE INFORMATION;
DIVIDEND INFORMATION" in the Proxy Statement is hereby incorporated herein by
reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth in "SUMMARY;" "INFORMATION CONCERNING THE SPECIAL
MEETING -- VOTE REQUIRED;" "MATTERS RELATING TO THE MERGER PROPOSAL -- INTERESTS
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON;" "THE MERGER AND THE MERGER
AGREEMENT -- THE MERGER;" and "CERTAIN RELATIONSHIPS AND TRANSACTIONS" in the
Proxy Statement is hereby incorporated herein by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a) - (b) The information set forth in "SUMMARY;" "INFORMATION CONCERNING
THE SPECIAL MEETING -- VOTE REQUIRED;" "MATTERS RELATING TO THE MERGER PROPOSAL
- -- BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL --
PURPOSE AND STRUCTURE OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -
- - RECOMMENDATION OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS; FAIRNESS OF
THE MERGER;" "CERTAIN RELATIONSHIPS AND TRANSACTIONS;" and "MATTERS RELATING TO
THE MERGER
<PAGE>
PROPOSAL -- POSITION OF SHP ACQUISITION AND THE OTHER FILING PERSONS" in the
Proxy Statement is hereby incorporated herein by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in "MATTERS RELATING TO THE MERGER PROPOSAL
- -- APPRAISAL RIGHTS" in the Proxy Statement is hereby incorporated herein by
reference.
(b) Not Applicable.
(c) Not Applicable.
ITEM 14. FINANCIAL INFORMATION.
(a) The information set forth in "SELECTED FINANCIAL DATA OF SUNSTONE AND
LESSEE" in the Proxy Statement is hereby incorporated herein by reference. The
consolidated financial statements of the Company are hereby incorporated by
reference to the Company's consolidated financial statements, related notes
thereto and other financial information contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 1998 as filed on March 30, 1999, as
amended by Annual Report on Form 10-K/A as filed on July 15, 1999, and in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 as
filed on May 17, 1999, as amended by Quarterly Report on Form 10-Q/A as filed on
July 15, 1999.
(b) Not Applicable.
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in "INFORMATION CONCERNING THE SPECIAL
MEETING -- PROXY SOLICITATION;" "MATTERS RELATING TO THE MERGER PROPOSAL --
BACKGROUND OF THE MERGER;" "MATTERS RELATING TO THE MERGER PROPOSAL -- PLANS FOR
SUNSTONE AFTER THE MERGER;" and "CERTAIN
<PAGE>
RELATIONSHIPS AND TRANSACTIONS" in the Proxy Statement is hereby incorporated by
reference.
(b) The information set forth in "INFORMATION CONCERNING THE SPECIAL
MEETING -- PROXY SOLICITATION;" "MATTERS RELATING TO THE MERGER PROPOSAL --
OPINION OF THE INDEPENDENT FINANCIAL ADVISOR;" "MATTERS RELATING TO THE MERGER
PROPOSAL -- FEES AND EXPENSES;" "APPENDIX B -- FAIRNESS OPINION OF GOLDMAN,
SACHS & CO., DATED JULY 12, 1999" and "APPENDIX C -- OPINION OF GOLDMAN, SACHS &
CO., DATED OCTOBER 7, 1999;" in the Proxy Statement is hereby incorporated by
reference.
ITEM 16. ADDITIONAL INFORMATION.
The information set forth in the Proxy Statement and the Appendices thereto
and the Exhibits hereto is incorporated herein by reference.
<PAGE>
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
2.1 Amended and Restated Agreement and Plan of Merger, dated as of
October 7, 1999, by and among SHP Acquisition, SHP Investors Sub
and the Company, which is incorporated herein by reference to
Appendix A to the Proxy Statement.
99.1 Proxy Statement filed by the Company with the Commission on even
date hereof and hereby incorporated by reference.
99.2 Letter to Stockholders of the Company from the Company, filed by
the Company with the Commission on even date hereof and hereby
incorporated by reference.
99.3 Notice of Special Meeting of the Stockholders of the Company
filed by the Company with the Commission on even date hereof and
hereby incorporated by reference.
99.4 Opinion of Goldman, Sachs & Co., dated July 12, 1999,
incorporated by reference to Appendix B to the Proxy Statement.
99.41 Opinion of Goldman, Sachs & Co., dated October 7, 1999,
incorporated by reference to Appendix C to the Proxy
Statement.
99.5 Financial Analysis Presentation Materials prepared by Goldman,
Sachs & Co. in connection with providing its opinion to the
Special Committee of the Board of Directors of the Company,
incorporated by reference to Exhibit 99.5 to the Schedule 13E-3
filed on August 18, 1999.
99.6 Financing Commitment Letter, dated July 12, 1999, from PW Real
Estate Investments Inc. to Westbrook Real Estate Fund III, L.P.,
incorporated by reference to Exhibit G to the Merger Agreement,
as filed on the Company's Form 8-K/A dated July 14, 1999.
99.7 Voting Agreement, dated as of July 12, 1999, among Westbrook Real
Estate Fund I, L.P., Robert A. Alter, Charles L. Biederman, SHP
Acquisition and the Company and Limited Irrevocable Proxy of
Westbrook Real Estate Fund I, L.P., Robert A. Alter and Charles
L.
<PAGE>
Biederman, incorporated by reference to Exhibit C to the Merger
Agreement, as filed on the Company's Form 8-K/A dated July 14,
1999.
99.8 Amended and Restated Limited Liability Company Agreement of SHP
Acquisition, dated as of July 12, 1999, incorporated by reference
to Exhibit 99.8 to the Schedule 13E-3 filed on August 18,
1999.
<PAGE>
SIGNATURE
After due 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.
Dated: October 7, 1999
Sunstone Hotel Investors, Inc.
By: /s/ R. Terrence Crowley
___________________________
Name: R. Terrence Crowley
Title: Authorized Person
SHP Acquisition, L.L.C.
By: /s/ Paul D. Kazilionis
___________________________
Name: Paul D. Kazilionis
Title: Manager
SHP Investors Sub, Inc.
By: /s/ Jonathan H. Paul
___________________________
Name: Jonathan H. Paul
Title: President
<PAGE>
Robert A. Alter
/s/ Robert A. Alter
_________________________________
Name: Robert A. Alter
Alter SHP L.L.C.
/s/ Robert A. Alter
By: ____________________________
Name: Robert A. Alter
Title: Authorized Person
Charles L. Biederman
/s/ Charles L. Biederman
_________________________________
Name: Charles L. Biederman
Biederman SHP L.L.C.
/s/ Charles L. Biederman
By: ____________________________
Name: Charles L. Biederman
Title: Authorized Person
<PAGE>
Westbrook Real Estate Fund III, L.P.
By: Westbrook Real Estate Partners
Management III, L.L.C., its General
Partner
By: Westbrook Real Estate Partners,
L.L.C., its sole member
By: /s/ Jonathan H. Paul
_______________________________
Name: Jonathan H. Paul
Title: Managing Principal
Westbrook Real Estate Co-Investment
Partnership III, L.P.
By: Westbrook Real Estate Partners
Management III, L.L.C., its General
Partner
By: Westbrook Real Estate Partners,
L.L.C., its sole member
By: /s/ Jonathan H. Paul
_______________________________
Name: Jonathan H. Paul
Title: Managing Principal
Westbrook SHP, L.L.C.
By: /s/ Jonathan H. Paul
_______________________________
Name: Jonathan H. Paul
Title: Authorized Person
Paul D. Kazilionis
/s/ Paul D. Kazilionis
____________________________________
Name: Paul D. Kazilionis
<PAGE>
EXHIBIT INDEX
Exhibit Description
2.1 Amended and Restated Agreement and Plan of Merger, dated as of
October 7, 1999, by and among SHP Acquisition, SHP Investors Sub
and the Company, which is incorporated herein by reference to
Appendix A to the Proxy Statement.
99.1 Proxy Statement filed by the Company with the Commission on even
date hereof and hereby incorporated by reference.
99.2 Letter to Stockholders of the Company from the Company, filed by
the Company with the Commission on even date hereof and hereby
incorporated by reference.
99.3 Notice of Special Meeting of the Stockholders of the Company
filed by the Company with the Commission on even date hereof and
hereby incorporated by reference.
99.4 Opinion of Goldman, Sachs & Co., dated July 12, 1999,
incorporated by reference to Appendix B to the Proxy Statement.
99.41 Opinion of Goldman, Sachs & Co., dated October 7, 1999,
incorporated by reference to Appendix C to the Proxy
Statement.
99.5 Financial Analysis Presentation Materials prepared by Goldman,
Sachs & Co. in connection with providing its opinion to the
Special Committee of the Board of Directors of the Company,
incorporated by reference to Exhibit 99.5 to the Schedule 13E-3
filed on August 18, 1999.
99.6 Financing Commitment Letter, dated July 12, 1999, from PW Real
Estate Investments Inc. to Westbrook Real Estate Fund III, L.P.,
incorporated by reference to Exhibit G to the Merger Agreement,
as filed on the Company's Form 8-K/A dated July 14, 1999.
99.7 Voting Agreement, dated as of July 12, 1999, among Westbrook Real
Estate Fund I, L.P., Robert A. Alter, Charles L. Biederman, SHP
Acquisition and the Company and Limited Irrevocable Proxy of
<PAGE>
Westbrook Real Estate Fund I, L.P., Robert A. Alter and Charles
L. Biederman, incorporated by reference to Exhibit C to the
Merger Agreement, as filed on the Company's Form 8-K/A dated July
14, 1999.
99.8 Amended and Restated Limited Liability Company Agreement of SHP
Acquisition, dated as of July 12, 1999, incorporated by reference
to Exhibit 99.8 to the Schedule 13E-3 filed on August 18,
1999.
