GERMANTOWN, TN— Equity Inns has unveiled a pair of moves involving the hotel REIT’s cumulative preferred stock, encompassing an offering as well as terms for the redemption of said shares. On the one hand, Equity Inns priced an offering of 3,000,000 shares of 8.75% Series B Cumulative Preferred Stock (liquidation preference of $25 per share). The Series B Preferred Stock may be redeemed at par at the election of the company on or after Aug. 11, 2008. It was noted these securities have no stated maturity, sinking fund or mandatory redemption, and are not convertible into any other securities of the company. The offering is expected to close on Aug. 11, 2003. The company similarly granted the underwriters an overallotment option to purchase 450,000 additional shares of the Series B Preferred Stock, which is exercisable within 30 days after closing. Net proceeds from the issuance— excluding any proceeds from the overallotment— are expected to be approximately $72.3 million. It was further reported the company intends to use approximately $68.8 million of these proceeds to redeem its 9 _% Series A Preferred Stock, and the balance to repay a portion of outstanding borrowings under the REIT’s line of credit. An application has been filed to list the Series B Preferred Stock on the New York Stock Exchange under the symbol ENN PrB. The book running manager for this offering is Friedman Billings Ramsey, and co-managers are A.G. Edwards & Sons, BB&T Capital Markets, and Stifel, Nicolaus & Co. With regard to the aforementioned 9_% Series A Cumulative Preferred Stock, Equity Inns maintained that on the redemption date of Aug. 11, 2003, it will redeem for cash all of those outstanding shares. The redemption price is slated to be $25 per share, plus accrued dividends to the redemption date, and dividends will reportedly cease to accrue and the Series A Preferred Stock will no longer be deemed outstanding from and after the redemption date. Currently, 2,750,000 shares of the Series A Preferred Stock, representing an aggregate redemption price of $68.8 million, are outstanding. The Series A Preferred Stock was issued in June 1998. As previously noted, the redemption price is to be paid with the proceeds of Equity Inns’ offering of its 8.75% Series B Cumulative Preferred Stock. As such, the redemption of the Series A Preferred Stock is subject to the closing of the Series B Preferred Stock offering. Shares of Series A Preferred Stock are to be surrendered to SunTrust Bank, Atlanta, GA, as redemption agent, for payment of the redemption price. It was also contended a redemption notice would be mailed by SunTrust Bank to all holders of record, and copies of the redemption notice may be requested directly from SunTrust Bank.
