PITTSBURGH— After making an all-cash offer for a controlling stake in Interstate last week, Shaner Hotel Group, a major Interstate Hotels shareholder, made a separate request to Interstate Chairman/CEO Thomas Hewitt on March 11, asking for a mailing list of all current stockholders, signaling a move to alert Interstate investors of the takeover opportunity. In its plan to reset the financial course of Interstate, Shaner is prepared to acquire 1,650,000 shares of Class A Common stock at $3 per share and 500,000 shares of Series B Preferred stock at a premium. In connection with the transaction, Interstate will redeem convertible notes in the principal amount of $25 million and all remaining shares of Series B Preferred stock. Shaner already holds 320,000 shares of Interstates Class A Common. Shaner will set aside additional funding for other expenses related to the transaction, such as fees for transitioning contracts. “We want to implement our strategy while Interstate is still in a viable position,” Lance Shaner, chairman and chief executive officer of Shaner Hotel Group. “The time for Shaner and Interstate to join forces is right now.” On February 13, Interstate Hotels Corporation announced a fourth-quarter loss of $3.1 million and a loss of $8 million for 2001. The initial proposal from Shaner was delivered on March 6 to the Interstate Board of Directors. The transaction is valued at approximately $40 million and stands until tomorrow, March 13. The Interstate Board has not yet commented on the content of Shaners current proposal. Shaner has been trying to acquire Interstate since October 2000 when the Interstate Board instead ratified a deal with Lehman Brothers Holdings.
