CapStar Hotel Company and American General Hospitality Corporation Announce Merger Registration Statement Effective; Shareholders to Vote in July.

WASHINGTON--(BUSINESS WIRE)--June 24, 1998--CapStar Hotel Company (NYSE: CHO) and American General Hospitality Corporation (NYSE: AGT) today announced that the Form S-4 registration statement filed with the Securities and Exchange Commission, in connection with the merger of CapStar with and into American General Hospitality, with the surviving entity being named "MeriStar Hospitality Corporation," was declared effective on June 22, 1998.

CapStar and American General Hospitality also announced that shareholder meetings to vote on the proposed merger have been scheduled for July 28, 1998 at the Embassy Row Hilton in Washington D.C. at 10 a.m. and 12 p.m. Eastern time, respectively.

If the merger receives shareholder approval, CapStar shareholders will receive one share of MeriStar Hospitality Corporation, a real estate investment trust (REIT), for each CapStar share owned, and American General Hospitality shareholders will receive .8475 shares of MeriStar Hospitality Corporation for each American General Hospitality share owned.

On March 16, the two companies announced that they had signed a definitive agreement to merge as equals. The companies believe that MeriStar will be the first publicly-traded lodging REIT to utilize the "paper-clip" REIT structure. Upon completion of the merger, MeriStar Hospitality Corporation is expected to own 108 hotels with 27,366 rooms.

Washington, D.C.-based CapStar Hotel Company owns and manages upscale, full-service hotels and resorts throughout the U.S. and Canada under such internationally known brands as Hilton, Sheraton, Marriott, Embassy Suites, Westin and Doubletree. CapStar's hotel portfolio comprises 55 owned hotels with 14,767 rooms, 46 leased (of which it manages 36) hotels that contain 6,581 rooms, and an additional 40 managed hotels owned by third parties that contain 6,899 rooms.

American General Hospitality Corporation is a self-administered publicly traded REIT with a portfolio of primarily full-service hotels. American General Hospitality currently owns 53 hotels with 12,599 rooms. Substantially all of American General Hospitality's hotels are operated under nationally recognized hotel brands, including Crowne Plaza, Hilton, Wyndham, Marriott, Holiday Inn Select, Radisson, Westin, DoubleTree, Holiday Inn and Sheraton.

The matters in this press release include "forward looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are qualified by cautionary statements contained herein and in CapStar's and American General Hospitality's filings with the Securities and Exchange Commission.

    CONTACT: CapStar Hotel Company
              John Emery, Chief Financial Officer, 202/965-4455
                   or
              American General Hospitality Corporation
              Bruce Wiles, Executive Vice President, 972/550-6802
                    or
              Daly Gray (Media)
              Jerry Daly or Carol McCune, 609/383-1414