CapStar Hotel Company completes IPO of 9.25 million shares; Lists common shares on NYSE.WASHINGTON, D.C.--(BUSINESS WIRE)--Aug. 26, 1996--CapStar Hotel Company today completed an initial public offering of 9.25 million shares of common stock at a price of $18 per share and commenced trading under the symbol "CHO CHO Carbohydrate (chemical formla Carbon Hydrogen Oxygen) CHO Chinese Hamster Ovary CHO Chemical Hygiene Officer CHO Chief Health Officer (corporate title) " on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Paul Whetsell, CapStar chairman and chief executive officer. The issue was underwritten by Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. , Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co., Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world. Inc., and Goldman Sachs & Co. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering will be used to pay down the company's debt. The company also announced that it was negotiating for a $225 million credit facility from Bankers Trust Company, subject to final documentation, to acquire and renovate additional hotels. CapStar is a hotel investment and management company which owns and manages upscale, full-service hotels under familiar brands, including Sheraton, Marriott, Westin and Hilton, throughout the United States. The company currently owns 12 upscale, full-service hotels, with 3,516 rooms, and is under contract to purchase five additional hotels with 1,212 rooms. CapStar expects to complete acquisition of these properties by year end. CapStar is one of the nation's largest hotel management companies and currently manages 49 hotels with 9,044 rooms. The company's growth strategy is to aggressively acquire and manage upscale, full-service hotels with potential for renovation and repositioning. "Hotel industry fundamentals remain strong, especially for upscale, full-service hotels," Whetsell said. "While occupancy and average daily rate have been climbing steadily through most of this decade, there are no signs of major new construction in our primary segment. Barriers to new construction in this segment remain high in most markets. "At the same time, there are a significant number of hotels for sale at prices well below replacement cost," he said. "By investing wisely in renovation and repositioning efforts, we believe we can significantly improve operating returns as well as increase the value of the real estate asset. With access to $225 million through our credit facility, we intend to aggressively seek out additional hotels while prices remain favorable. We have a substantial pipeline of acquisition candidates." For the six months ended June 30, 1996, operating performance of the company's hotels improved significantly from the prior year period. Total revenues rose 7.5 percent, gross operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. increased 14.1 percent and revenue per available room (REVPAR) was up 12.5 percent over the comparable year earlier period. Whetsell said the company has spent approximately $16 million in a planned $30 million program to upgrade and reposition the company's current portfolio of 12 hotels. "We anticipate that additional renovations will only further enhance the strong operating results we have already achieved," he noted. CONTACT: CapStar, Washington Peggy Roth Murray, 202/965-4455 or Daly Gray Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most , Northfield Jerry Daly, 609/383-1414 |
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