STATE COLLEGE- Shaner Hotel Group raised its offer to buy Interstate Hotels Corp. to $4.50 per share, or about $27 million, and said it would continue in its pursuit despite Interstate managements repeated refusal to hold discussions.
The new offer represents a 76% premium over Interstates $2.56 per share closing price on October 11.
Last week, Shaner offered Interstate a $4.125 per share, or $25 million bid, which Interstate executives recommended shareholders reject. The company said a plan from a group led by Lehman Brothers to invest $30 million in equity and convertible debt was financially superior.
The new offer also includes a pledge to deposit $1 million in escrow to compensate Interstate for all costs associated with extending its existing proposal from the Lehman group, plus pay a $500,000 premium. The deposit would be forfeited if Shaner fails to submit an unconditional bid for the company for a price at or above $4.50.
Shaner also noted that it might sweeten its bid, if results from a 30-day due diligence process support such an offer.(10/11/00)