Saturday, September 23, 2006

TravelCenters of America to Sell and Leaseback 162 Service Stations in 40 States

Hospitality Properties Trust Press Release - September 18, 2006

Hospitality Properties Trust (NYSE: HPT) today announced that it has entered an agreement to purchase TravelCenters of America, Inc. ('TA') from a group of private equity investors led by Oak Hill Capital Partners, L.P. for total consideration of approximately $1.9 billion.

When this transaction is closed, HPT will retain substantially all of TA's real estate and transfer TA's operating business to a subsidiary which will be distributed to HPT's shareholders. TA's substantial real estate will be retained by HPT and leased to TA. HPT currently expects this transaction to close in early 2007.

A typical TravelCenters site includes 20 acres of land, parking for about 170 tractor-trailers and 100 cars, a 150-seat restaurant, truck repair facilities and gas and diesel stations. About 20 of TravelCenters' sites also include a hotel.

John Murray, President of HPT, stated that "The HPT lease will have the same security features which characterize HPT's existing hotel leases and management contracts: one long term lease for all the properties, a strong parent company guaranty, all or none renewal options, etc. Moreover, based upon historical experience in TA's business, we believe the percentage rents which HPT receives from the New TA may not be subject to the financial cyclicality which has historically affected hotels."

Merrill Lynch & Co. acted as exclusive financial adviser to HPT in this transaction. TravelCenters of America was advised by Lehman Brothers and Credit Suisse. Sphere: Related Content

No comments:

Wikinvest Wire