Barcelo Crestline Corp., a privately held McLean hotel company, said yesterday it plans to acquire a Missouri-based firm that is one of the country's largest independent owners and operators of hotels.
Barcelo Crestline has reached a deal with John Q. Hammons Hotels Inc., a publicly traded outfit that owns and manages 46 hotels in 20 states, most of them franchises under brand names such as Embassy Suites, Holiday Inn and Marriott. Barcelo intends to pay $13 in cash per share to minority shareholders of Hammons, which would value the company at $63.5 million and is a 15 percent premium over the company's Friday closing price.
John Q. Hammons, the chairman and 76 percent owner of the eponymous company, has agreed to the transaction, executives of both companies said. Hammons intends to have his ownership stake rolled into equity in the combined companies and would take a seat on the board of the new entity, they said.
Barcelo Crestline resulted from the 2002 merger of Crestline Capital Corp., a Host Marriott spinoff, with the Spanish hotel giant Barcelo Hotels & Resorts. It manages about 125 hotels, resorts and conference centers in the United States under various brands. Locally, its properties include the Barcelo Radisson near Dupont Circle and Holiday Inn on the Hill. Chief executive Bruce D. Wardinski said yesterday that the deal would give the combined companies better economies of scale in its business of managing mostly mid-priced, full-service hotels.
Hammons, 85, was one of the earliest Holiday Inn franchisees, starting in the 1950s, and an early builder of atriums in mid-size hotels. He said a big reason for the deal was to take the company private. He said Sarbanes-Oxley corporate governance legislation has driven up the accounting and other costs for being a public company to $2 million a year, an unacceptable level for a company that lost $7 million last year.
The companies expect the transaction to be completed in January 2005, pending a review by a committee of independent directors of the Hammons company. Shares of Hammons rose $1.64, to $12.95, yesterday.