UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 11, 2014
Strategic Hotels & Resorts, Inc.
(Exact name of registrant as specified in its charter)
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| Maryland |
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001-32223 |
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33-1082757 |
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of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
200 West Madison Street, Suite 1700
Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (312) 658-5000
Not Applicable
(Former
name or former address, if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
As previously disclosed, on
May 27, 2014, SHR Del Partners, LP, an indirect wholly-owned subsidiary of Strategic Hotel Funding, L.L.C., the operating company of Strategic Hotels & Resorts, Inc. (the “Company”), entered into a purchase and sale agreement
to acquire the remaining 63.6% ownership interest in the Hotel del Coronado (the “Hotel”) from the Company’s joint venture partner, an affiliate of Blackstone Real Estate Partners VI L.P. (the “BREP Affiliate”), for $210
million in cash (the “Del Acquisition”). On June 11, 2014, the Del Acquisition closed. Prior to the Del Acquisition, the Company owned a 36.4% ownership interest in the Hotel through a joint venture with the BREP Affiliate. As a
result of the consummation of the Del Acquisition, under the provisions of business combination accounting guidance, 100% of the Hotel’s assets and liabilities will now be consolidated in the Company’s balance sheet at the acquisition-date
fair values and the results of operations will be consolidated in the Company’s statement of operations from the date of purchase, including the $475 million mortgage and mezzanine loans (the “Loans”) secured by the Hotel.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above in “Item 2.01 – Completion of Acquisition or Disposition of Assets” of this Current Report on
Form 8-K (this “Current Report”) is incorporated herein by reference. Additional information regarding the Loans is set forth in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014.
| Item 7.01 |
Regulation FD Disclosure. |
A copy of the press release announcing the closing of the Del
Acquisition is attached to this Current Report as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 7.01 disclosure.
The information in Item 7.01 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Current Report,
including Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language in any such filing.
| Item 9.01 |
Financial Statements and Exhibits. |
| (a) |
Financial statements of businesses acquired. |
In connection with the Del Acquisition,
the financial statements that are required to be filed pursuant to this item will be filed by amendment to this Current Report as soon as practicable, but not later than 71 days after the date that this Current Report is required to be filed.
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Pro forma financial information. |
In connection with the Del Acquisition, the pro forma
financial information that is required to be filed pursuant to this item will be filed by amendment to this Current Report as soon as practicable, but not later than 71 days after the date that this Current Report is required to be filed.
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| Exhibit Number |
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Description |
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| 99.1 |
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Press release dated June 12, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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STRATEGIC HOTELS & RESORTS, INC. |
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| June 16, 2014 |
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By: |
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/s/ Paula C. Maggio |
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Name: |
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Paula C. Maggio |
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Title: |
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Executive Vice President, General Counsel & Secretary |
EXHIBIT INDEX
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| Exhibit Number |
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Description |
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| 99.1 |
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Press release dated June 12, 2014 |
Exhibit 99.1
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COMPANY CONTACTS: Diane
Morefield EVP, Chief Financial Officer Strategic
Hotels & Resorts, Inc. (312) 658-5740
Jonathan Stanner VP, Capital Markets & Treasurer
Strategic Hotels & Resorts, Inc. (312)
658-5746 |
FOR IMMEDIATE RELEASE
THURSDAY, JUNE 12, 2014
STRATEGIC
HOTELS & RESORTS, INC. CLOSES ACQUISITION OF REMAINING
INTEREST IN THE HOTEL DEL CORONADO
CHICAGO – June 12, 2014 – Strategic Hotels & Resorts, Inc. (NYSE: BEE), today announced that the Company closed on the
acquisition of the remaining 63.6 percent ownership interest in the Hotel del Coronado for $210.0 million. The transaction valued the asset at $787.0 million and includes the assumption of the existing $475.0 million mortgage financing. The closing
of the transaction is reflected in the Company’s full-year 2014 guidance.
About the Company
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT) which owns and provides value enhancing asset management of high-end hotels
and resorts in the United States and Europe. The Company currently has ownership interests in 16 properties with an aggregate of 7,862 rooms and 835,000 square feet of multi-purpose meeting and banqueting space. For a list of current properties and
for further information, please visit the Company’s website at www.strategichotels.com.
This press release contains forward-looking statements
about Strategic Hotels & Resorts, Inc. (the “Company”). Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties. These
forward-looking statements include statements regarding the Company’s future financial results, stabilization in the lodging space, positive trends in the lodging industry and the Company’s continued focus on improving profitability.
Actual results could differ materially from the Company’s projections. Factors that may contribute to these differences include, but are not limited to the following: the effects of economic conditions and disruptions in financial markets upon
business and leisure travel and the hotel markets in which the Company invests; the Company’s liquidity and refinancing demands; the Company’s ability to obtain, refinance or extend maturing debt; the Company’s ability to maintain
compliance with covenants contained in its debt facilities; stagnation or deterioration in economic and market conditions, particularly impacting business and leisure travel spending in the markets where the Company’s hotels operate and in
which the Company invests, including luxury and upper upscale product; general volatility of the capital markets and the market price of the Company’s shares of common stock; availability of capital; the Company’s ability to dispose of
properties in a manner consistent with its investment strategy and liquidity needs; hostilities and security concerns, including future terrorist attacks, or the apprehension of hostilities, in each case that affect travel within or to the United
States or Germany or other countries where the Company invests;
difficulties in identifying properties to acquire and completing acquisitions; the Company’s failure to maintain effective internal control over financial reporting and disclosure controls
and procedures; risks related to natural disasters; increases in interest rates and operating costs, including insurance premiums and real property taxes; delays and cost-overruns in construction and development; marketing challenges associated with
entering new lines of business or pursuing new business strategies; the Company’s failure to maintain its status as a REIT; changes in the competitive environment in the Company’s industry and the markets where the Company invests; changes
in real estate and zoning laws or regulations; legislative or regulatory changes, including changes to laws governing the taxation of REITs; changes in generally accepted accounting principles, policies and guidelines; and litigation, judgments or
settlements.
Additional risks are discussed in the Company’s filings with the Securities and Exchange Commission, including those appearing
under the heading “Item 1A. Risk Factors” in the Company’s most recent Form 10-K and subsequent Form 10-Qs. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable
assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and the Company undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise, except as required by law.
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