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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
December 17, 1997
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PROMUS HOTEL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 001-13719 67-1716020
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
755 Crossover Lane
Memphis, Tennessee 38117
(Address of Principal Executive Offices) (Zip Code)
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(901) 374-5000
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(Registrant's telephone number, including area code)
PARENT HOLDING CORP.
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
Doubletree Corporation, a Delaware corporation ("Doubletree"), and
Promus Hotel Corporation, a Delaware corporation ("Old Promus"), entered
into an Agreement and Plan of Merger dated as of September 1, 1997 by and
among Old Promus, Doubletree and Parent Holding Corp., a Delaware corporation
(the "Company"), as amended on October 1, 1997 to add Promus Acquisition
Corp., a Delaware corporation, and Doubletree Acquisition Corp., a Delaware
corporation, as parties (the "Merger Agreement"). On December 19, 1997,
pursuant to the Merger Agreement, (i) Doubletree Acquisition Corp. merged
with and into Doubletree with Doubletree surviving and becoming a
wholly-owned subsidiary of the Company (the "Doubletree Merger"), (ii)
Promus Acquisition Corp. merged with and into Old Promus with Old Promus
becoming a wholly-owned subsidiary of the Company (the "Promus Merger," and
together with the Doubletree Merger, the "Merger"), and (iii) the Company
was renamed "Promus Hotel Corporation." After the Merger, Old Promus was
renamed "Promus Operating Company, Inc."
The Merger Agreement contemplated that the Company would be a
holding company for the businesses of Doubletree and Old Promus. Special
meetings of the stockholders of Doubletree and Old Promus at which the
stockholders were asked, pursuant to a Joint Proxy Statement/Prospectus
contained within the Company's Form S-4 Registration Statement (No. 333-40233)
filed with the Securities and Exchange Commission on November 14, 1997, to
consider and vote upon, among other things, the Merger Agreement were held
on December 18, 1997. The stockholders of each of Doubletree and Old Promus
approved and adopted the Merger Agreement at their respective meetings.
Following receipt of these approvals, Certificates of Merger
relating to the Doubletree Merger and the Promus Merger were filed with the
Secretary of State of the State of Delaware. These filings were accepted and
the Doubletree Merger and the Promus Merger became effective on December 19,
1997 with the result that each of Doubletree and Old Promus became, as of
December 19, 1997, wholly owned subsidiaries of the Company. The Merger was
structured as a "merger of equals" and did not involve the sale of either
Doubletree or Old Promus. No consideration was paid by either Doubletree or
Old Promus to the other, consequently there was no source of funds.
Upon consummation of the Promus Merger, each outstanding share of
Old Promus Common Stock was converted into the right to receive .925 of a
share of the common stock of the Company, par value $.01 (the "Common
Stock"). Fractional shares of Common Stock, if any, will not be issued in
connection with the Promus Merger. Holders will be paid an amount in cash
equal to the same fraction of the fair market value of a whole share of
Common Stock, determined as set forth in the Merger Agreement. Upon
consummation of the Doubletree Merger each outstanding share of Doubletree
was converted into the right to receive one share of Common Stock. The
exchange ratios were determined through arm's-length negotiation between
Doubletree and Old Promus.
The Common Stock is listed on the New York Stock Exchange, Inc. and
trades under the symbol "PRH". The Common Stock is also listed on The Chicago
Stock Exchange, the Pacific Exchange, Inc., and the Philadelphia Stock
Exchange.
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The businesses of the Company, through its wholly-owned subsidiaries
Doubletree and Old Promus and their respective subsidiaries, initially
consists of the businesses conducted by Doubletree and Old Promus and their
respective subsidiaries immediately prior to the consummation of the Merger.
In this regard, the Company intends to continue to devote the assets
associated with these businesses to generally the same purposes as these
assets were employed prior to the Merger.
Item 5. Other Events.
On December 17, 1997 the Board of Directors of the Company
adopted a Stockholder Rights Agreement (the "Rights Plan").
In connection with the Rights Plan, the Board of Directors of the
Company approved the issuance of one preferred share purchase right (the
"Rights") for each share of common stock, par value $.01 per share (the
"Common Shares"), of the Company issued at or after the effective time
(the "Effective Time") of the mergers of two wholly-owned subsidiaries of the
Company with and into Doubletree Corporation and Promus Hotel Corporation
(collectively, the "Merger"). Each Right will entitle the registered holder
thereof, after the Rights become exercisable and until December 17, 2007 (or
the earlier redemption, exchange or termination of the Rights), to purchase
from the Company one one-hundredth (1/100th) of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares"), at a price of $160.00
per one one-hundredth (1/100th) of a Preferred Share, subject to certain
anti-dilution adjustments (the "Purchase Price"). Until the earlier to occur
of (i) ten (10) days following a public announcement that a person or group
of affiliated or associated persons has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the Common Shares (an
"Acquiring Person") or (ii) ten (10) business days (or such later date as may
be determined by action of the Board of Directors prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following
the commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the Common Shares (the
earlier of (i) and (ii) being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate. The
Rights will be transferred with and only with the Common Shares until the
Distribution Date or earlier redemption or expiration of the Rights. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the Rights. The
Rights will at no time have any voting rights.
In the event that a Person becomes an Acquiring Person, each holder
of a Right, other than Rights that are or were acquired or beneficially owned
by the Acquiring Person (which Rights will thereafter be void), will
thereafter be entitled to purchase one one-hundredth of a share of Preferred
Stock for each Right. In the event that, after a person has become an
Acquiring Person, the Company is acquired in a merger or other business
combination transaction, the Company acquires another entity in a
transaction in which all or part of the Common Shares are changed into or
exchanged for securities, cash or any other property of the Company or any
other
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entity, or more than 50% of the assets or earning power of the Company
are sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right, that number of shares of common
stock of the Company surviving in such transaction which at the time of such
transaction would have a market value of two times the then current Purchase
Price of one Right.
At any time after a Person becomes an Acquiring Person and prior to
the earlier of one of the events described in the last sentence in the
previous paragraph or the acquisition by such Acquiring Person of 50% or more
of the then outstanding Common Shares, the Board of Directors may cause the
Company to exchange the Rights (other than Rights owned by an Acquiring
Person which have become void), in whole or in part, for Common Shares at an
exchange rate of that number of Common Shares having an aggregate value equal
to the Purchase Price per Right (subject to adjustment).
The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The Rights will expire on December 17, 2007 (unless earlier
redeemed, exchanged or terminated). First Union National Bank is the Rights
Agent.
The Purchase Price payable, and the number of one-hundredths of a
Preferred Share or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of
the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares or convertible securities at less than the current
market price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness, cash,
securities or assets (excluding regular periodic cash dividends at a rate not
in excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net
income per share of the Company for the four quarters ended immediately
prior to the payment of such dividend, or dividends payable in Preferred
Shares (which dividends will be subject to the adjustment described in clause
(i) above)) or of subscription rights or warrants (other than those referred
to above).
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive
dividends.
Any of the provisions of the Rights Agreement dated as of December
17, 1997 between the Company and the Rights Agent (the "Rights Agreement")
may be amended by the Board of Directors of the Company for so long as the
Rights are then redeemable, and after the
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Rights are no longer redeemable, the Company may amend or supplement the
Rights Agreement in any manner that does not adversely affect the interests
of the holders of the Rights.
One Right will be distributed to stockholders of the Company for
each Common Share received by them in connection with the Merger at the
Effective Time. As long as the Rights are attached to the Common Shares, the
Company will issue one Right with each new Common Share issued after the
Effective Time so that all such shares will have attached Rights. The
Company has agreed that, from and after the Distribution Date, the
Company will reserve 5,000,000 shares of Preferred Stock initially for
issuance upon exercise of the Rights.
The Rights are designed to assure that all of the Company's
stockholders receive fair and equal treatment in the event of any proposed
takeover of the Company and to guard against partial tender offers, open
market accumulations and other abusive tactics to gain control of the
Company without paying all stockholders a control premium. The Rights will
cause substantial dilution to a person or group that acquires 15% or more of
the Company's stock on terms not approved by the Company's Board of
Directors. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors at any time prior to the first
date that a Person or group has become an Acquiring Person.
The Rights Agreement specifying the terms of the Rights is
incorporated herein by reference as an exhibit to this Report. The foregoing
description of the Rights is qualified in its entirety by reference to such
exhibit.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
The audited financial statements of Old Promus for the three
previous calendar years, and the accountants' report related thereto, set
forth in Old Promus's Annual Report on Form 10-K for the year ended December
31, 1997, and the unaudited financial statements for the period ended
September 30, 1997 set forth in Old Promus's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1997, the unaudited financial
statements for the period ended June 30, 1997 set forth in Old Promus's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 and the
unaudited financial statements for the period ended March 31, 1997 set forth
in Old Promus's Quarterly Report on Form 10-Q for the quarter ended March 31,
1997, are incorporated herein by reference.
The audited financial statements of Doubletree for the three
previous calendar years, and the accountants' report related thereto, set
forth in Doubletree's Annual Report on Form 10-K for the calendar year ended
December 31, 1996, and the unaudited financial statements for the period
ended September 30, 1997 set forth in Doubletree's Quarterly Report on Form
10-Q for the quarter ended September 30, 1997, the unaudited financial
statements for the period ended June 30, 1997 set forth in Doubletree's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and the
unaudited financial statements for the period ended March 31, 1997 set forth
in Doubletree's Quarterly Report on Form 10-Q for the quarter ended March 31,
1997, are incorporated herein by reference.
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(b) Pro forma financial information.
The information set forth under the caption "Unaudited Pro Forma
Financial Information" in the Joint Proxy Statement/Prospectus dated
November 14, 1997, which is part of the Registration Statement on Form S-4 (No.
333-40233) filed by the Company is incorporated herein by reference.
B. Exhibits
2.1 Agreement and Plan of Merger dated as of September 1,
1997 by and among Promus Hotel Corporation, Doubletree
Corporation, and Parent Holding Corp. (incorporated by
reference from Old Promus's Current Report on Form 8-K,
filed September 5, 1997).
2.2 Amendment Agreement, dated October 1, 1997, by and
among Doubletree Acquisition Corp. and Promus
Acquisition Corp. (incorporated by reference from the
Company's Registration Statement on Form S-4, filed
November 14, 1997 (File No. 333-40233)).
4. Rights Agreement, dated as of December 17, 1997,
between Parent Holding Corp. and First Union National
Bank which includes the form of Certificate of
Designations of the Series A Junior Participating
Preferred Stock of Promus Hotel Corporation as Exhibit A
and the form of Right Certificate as Exhibit B
(incorporated by reference from the Company's Current
Report on Form 8-A, filed December 17, 1997).
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of KPMG Peat Marwick LLP.
99. Text of Press Release, dated December 19, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROMUS HOTEL CORPORATION
Date: December 19, 1997 By: /s/ RALPH B. LAKE
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Name: Ralph B. Lake
Title: Executive Vice President,
General Counsel and Secretary
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form 8-K, of our reports dated February 5, 1997 and March
18, 1997, included (or incorporated by reference) in Promus Hotel
Corporation's Form 10-K for the year ended December 31, 1996. It should be
noted that we have not audited any financial statements of the Company
subsequent to December 31, 1996 or performed any audit procedures subsequent
to March 18, 1997.
/s/ Arthur Andersen LLP
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ARTHUR ANDERSEN LLP
Memphis, Tennessee,
December 22, 1997
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the current report on Form
8-K of Promus Hotel Corporation, dated December 17, 1997 of our report dated
March 22, 1997, relating to the consolidated balance sheets of Doubletree
Corporation and subsidiaries as of December 31, 1996 and 1995 and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 1996.
KPMG Peat Marwick LLP
Phoenix, Arizona
December 22, 1997
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EXHIBIT 99.
[LETTERHEAD]
FOR IMMEDIATE RELEASE http://www.promus-hotel.com
Contact: William L. Perocchi, Executive Vice President
and Chief Financial Officer
(602)220-6810
Gregg A. Swearingen, Investor Relations
(901)374-5468
John C. Hawkins, Corporate Communications
(901)374-5529
DOUBLETREE, PROMUS COMPLETE MERGER TRANSACTION;
STOCK BEGINS TRADING ON NYSE (PRH)
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Stockholder Rights Plan Adopted
MEMPHIS, Tenn., December 19, 1997 - Doubletree Corporation and Promus
Hotel Corporation announced today the completion of their previously
announced merger. The newly-formed company is called Promus Hotel
Corporation, whose stock begins trading today on the New York Stock Exchange
and other regional exchanges under the symbol "PRH." Stockholders of both
former companies overwhelmingly approved the merger transaction yesterday. As
a result of the merger, each share of Doubletree Corporation common stock has
been converted into one share of common stock of the new company, and each
share of the former Promus Hotel Corporation has been converted into 0.925 of
a share of common stock of the new company.
"We are very pleased that we will begin the new year as one combined
enterprise," said Raymond E. Schultz, chairman and chief executive officer.
"Three months after we announced our intention to merge, we are more
convinced than ever that this merger is a perfect fit. Together we will
realize significant benefits for all our constituents."
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Merger completion/page 2
He added, "Our combined portfolio of fast-growing upscale and mid-priced
brands is ideally positioned to benefit shareholders, guests and employees
through cross-selling and cross-marketing programs that build on our
complementary management and franchising strengths. In addition, we will be
able to offer franchisees, developers and investors a full line of attractive
hotel development opportunities."
Richard M. Kelleher, president and chief operating officer of the new
Promus Hotel Corporation, said, "Because our companies shared a common vision
and similar culture, we have been able to move swiftly in integrating our two
organizations. We are currently implementing programs to achieve cost savings
in our newly combined corporate functions and support operations. Fundamental
to our growth strategy are: (1) increasing revenue and operating performance
of existing hotels; (2) developing new hotels under our existing brands; (3)
achieving purchasing synergies; and (4) acquisition of hotel companies in the
rapidly consolidating lodging industry. Our ability to develop new hotels and
acquire hotel companies will be enhanced through our significant cash flow,
strong balance sheet and access to sources of lower cost capital."
The new Promus Hotel Corporation (the "Company") also announced that its
Board of Directors has adopted a Stockholder Rights Plan and approved the
issuance of one preferred stock purchase right (a "Right") for each share of
the Company's common stock issued at or after the effective time of the
merger.
Each Right initially will entitle stockholders to buy one one-hundredth of
a share of preferred stock for $160. The Rights will be exercisable only if a
person or group acquires beneficial ownership of 15% or more of the Company's
common stock or commences a tender or exchange offer upon consummation of
which such person or group would beneficially own 15% or more of the
Company's common stock (an "Acquiring Person").
The Rights are designed to assure that all the Company's stockholders
receive fair and equal treatment in the event of any proposed takeover of the
Company and to guard against partial tender offers, open market accumulations
and other tactics to gain control of the Company without paying all
stockholders a control premium. The Rights will cause substantial dilution to
a person or group that acquires 15% or more of the Company's common stock on
terms not approved by the Company's Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board
of Directors at any time prior to the first date that a person or group
becomes an Acquiring Person.
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Merger completion/page 3
The new Promus Hotel Corporation (NYSE:PRH) is one of the world's premier
lodging companies, with system-wide annual revenues of approximately $5
billion. The company owns, operates or franchises more than 1,200 hotels,
with approximately 177,000 rooms throughout the United States, Canada, Mexico
and Latin America. It is the franchisor and operator of the Doubletree Hotels
and Guest Suites, Embassy Suites, Homewood Suites, Club Hotels by Doubletree,
Hampton Inn, Hampton Inn & Suites, Embassy Vacation Resorts and Hampton
Vacation Resorts brands.
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