Interstate To Focus On 3rd Party Management

PITTSBURGH? Now that the spin-off of Interstate Hotels Corp. from Wyndham International and Patriot American Hospitality has been completed, Interstate plans to concentrate on third party management, according to Thomas Hewitt, chairman/CEO. ?The spin-off was something we all knew was going to happen since the time of our merger with Patriot, and all of the parties involved worked hard to ensure that the new Interstate was structurally sound and positioned for growth,? Hewitt said. ?We have an excellent portfolio of hotels spread over desirable geographic areas, and the Interstate name is still recognized as a high quality organization,? added Hewitt, who joined Interstate in March 1999 from Carnival Resorts & Casinos where he was president/COO. Interstate will now be focusing on ?what we have always done well, third party management,? Hewitt said. And he noted that Interstate will continue to have ?an important working relationship? with Wyndham. ?They will have ownership in Interstate and we will manage hotels for them.? Interstate also announced that it sold its equity interests in The Charles Hotel Complex in Cambridge, MA for $19.25 million pursuant to a contract for sale entered into prior to Interstate?s spin-off from Wyndham and Patriot American. The complex includes the hotel, retail and office space. Interstate has managed The Charles Hotel in Harvard Square since its opening in 1985 and has agreed to manage it for an additional ten-year term. ?We are pleased to continue our long-term relationship with one of the premiere independent luxury hotels in the Northeast,? Hewitt said. As far as the spin-off, Wyndham distributed 92% of Interstate in the form of a dividend to Wyndham?s shareholders. The remaining 8% of Interstate is owned equally by Wyndham and Marriott International. (Wyndham and Patriot American shares are paired and trade together.) With the distribution, ?we are unlocking incremental value for our shareholders,? said Wyndham Chairman/CEO James Carreker. ?Now, in addition to owning one of the nation?s largest branded hotel companies, our shareholders also have a direct ownership stake in Interstate, one of the leading third party hotel management companies.? Wyndham shareholders received one share of Interstate Class A common stock for every 30 securities of Wyndham. Cash is being paid in lieu of any fractional shares in an amount determined by multiplying each fractional share of $6, which is the estimated initial value of Interstate shares. Wyndham currently has approximately 167 million shares and equivalents outstanding, not including approximately 97 million shares currently held by counterparties to forward equity transactions. Wyndham has entered into agreements with the counterparties providing that the counterparties will return their Interstate shares to Wyndham in return for certain adjustments to the forward equity contracts, resulting in the cancellation of their Interstate shares. On a proforma basis after giving effect to the agreements with the forward equity holders, Interstate will have approximately 6.3 million shares outstanding. The distribution was paid June 18 in the form of a taxable dividend to Wyndham shareholders of record at the close of business on June 7, 1999. Interstate is a major hotel management company and operates 165 hotels with more than 31,000 rooms in the United States, Canada, the Caribbean and Russia, excluding hotels that will be managed by Wyndham and Marriott International under terms of the settlement agreement with Marriott. Patriot American Hospitality is one of the largest branded hotel companies in the U.S. Its paired operating company, Wyndham International, comprised of the Grand Bay Hotels & Resorts Division, the Wyndham Hotel Group and PAH Management Services, leases, manages and franchises primarily upscale and luxury hotel and resort properties represented by its proprietary brands and provides management services for third-party owned hotels a