New Direction for ShoLodge
HENDERSONVILLE, Tenn. -- ShoLodge, Inc. LODG today announced the execution of an agreement with Prime Hospitality Corp. ("Prime") that contemplates a series of transactions in which ShoLodge will (i) sell to Prime its leasehold interest in 20 Sumner Suites hotels currently leased and operated by ShoLodge, (ii) sell its interest in four Sumner Suites hotels currently owned and operated by ShoLodge, which the new owner would then lease to Prime,...
ShoLodge expects to receive approximately $54 million in cash at closing and future minimum annual rental payments of approximately $3 million beginning at closing. Commenting on the transaction, Leon Moore, Chief Executive Officer of ShoLodge, said, "We believe the Sumner Suites product to be one of the best mid-priced all-suite hotels in the industry. This transaction gives us the opportunity to continue to apply our experience in the recent development of the Sumner Suites brand and the earlier development of the AmeriSuites brand, toward the development of mid-priced all-suite hotels for ourselves and others, and to continue giving our attention to the established Shoney's Inn chain. We completed one hotel development for a third party in December and are nearing completion of another hotel for the same party. Another development is currently in progress, and we anticipate that several additional hotel development contracts will be executed soon. These are in addition to the two AmeriSuites hotels to be developed for Prime discussed above."
ShoLodge also owns or manages 17 Shoney's Inns and franchises an additional 59 Shoney's Inns. Headquartered in Hendersonville, Tennessee, ShoLodge's common stock is traded on NASDAQ under the symbol "LODG".
This press release contains forward-looking statements relating to certain matters, which reflect management's best judgment, based on factors currently known and involve risks and uncertainties. Actual results could differ materially from the anticipated results or expectations expressed in the Company's forward-looking statements. Forward-looking information provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors which are contained in the Company's Securities and Exchange Commission (SEC) filings, including its periodic reports filed under the Securities Exchange Act of 1934, as amended. Copies of these filings are available upon request from the Company. In addition, the Company disclaims any intent or obligation to update these forward-looking statements.