PEHAC announced today that it has signed a stock purchase agreement with sellers Lehwood Vienna GMBH, Starman Deutschland Holdings GMBH and Lehwood Netherlands Holdings B.V. to acquire a freehold interest in Le Meridien Grand Hotel Nuremberg and leasehold interests in six additional hotels, including Le Meridien Park Hotel Frankfurt, Le Royal Meridien Hamburg, Le Meridien Stuttgart, Le Meridien Munich, Le Meridien Vienna and Le Meridien Hotel Des Indes in The Hague.

Further, PEHAC announced that it is in final negotiations regarding the proposed acquisition of a leasehold interest in Le Meridien Barcelona, a 229-room hotel, from Starman Hoteles Espana. Assuming the successful completion of each of these transactions, these hotels will continue to operate under a license and management agreement with Starwood Hotels and Resorts Worldwide Inc.

PEHAC believes that this combination of acquisitions offers a rare opportunity to acquire a platform of high-quality hotel properties in key-European cities, enabling it to pursue a successful buy- and build strategy.

The portfolio, excluding Le Meridien Barcelona, represents an aggregate of 1,819 hotel rooms and is expected, based on performance year-to-date, to generate approximately €102 million in revenues in 2007. Under the terms of the stock purchase agreement, the total purchase price, excluding Le Meridien Barcelona, will be € 49.25 million, and is expected to be closed in cash, without the use of debt financing. PEHAC will commit to spend an additional € 10 million for necessary capital expenditures, which amount is expected to be used primarily for the refurbishment of the freehold property in Nuremberg. Each of the other hotels subject to the stock purchase agreement as well as the Barcelona property have been extensively renovated in recent years.

Based on operating results in 2007 and estimates it believes to be reasonable for the coming year, PEHAC expects the portfolio of hotels, excluding Le Meridien Barcelona, to achieve approximately € 8.0 million in earnings before interest, depreciation and amortization, or EBITDA, in 2008.

Given the high-quality assets in the portfolio, and assuming the successful implementation of a pro-active asset, property and project management strategy and the continued implementation of Starwood’s respected management system and favorable market conditions, PEHAC believes that there is significant potential for further operating improvements for the portfolio.

The main conditions precedent to closing of the acquisition include obtaining approval from PEHAC’s supervisory board and its shareholders.

As a blank-check company, PEHAC intends to seek shareholder approval at an Extraordinary General Meeting of Shareholders. PEHAC expects to hold an Extraordinary General Meeting of Shareholders on or about Tuesday, December 11, 2007 at 4.00 PM CET at the Golden Tulip Apollo Hotel, Apollolaan 2 in Amsterdam.

PEHAC will place announcements in two Dutch newspapers at least 15 days prior to the Extraordinary General Meeting of Shareholders in order to convene the meeting. All relevant information will, at the same time, be available at PEHAC’s offices and on its website: .

PEHAC will proceed with the acquisition only if (1) the acquisition is approved by its shareholders with an absolute majority and (2) PEHAC has sufficient financial resources to pay both:

  • a. the cash-consideration for the acquisition and the capital expenditure requirements set forth above; and
  • b. all sums due to shareholders who vote against the acquisition and simultaneously exercise their Redemption/Repurchase rights, as described in the offering circular dated June 12, 2007 and the supplement thereto dated July 16, 2007.

Subject to applicable law, at a date which will be in the period of June 2008-August 2008, PEHAC intends to offer to repurchase and/or redeem 2 million units (each consisting of one share and one warrant), at a price which is expected to be approximately EUR 8.50 per unit. The number of units that PEHAC intends to offer to repurchase and/or redeem will be reduced by the number of shares on which votes are cast against the acquisition and whose shareholders have exercised their Redemption/Repurchase rights in connection with the announced Extraordinary General Meeting. Holders of Founders’ shares and warrantholders are excluded from this repurchase and/or redemption offer.

PEHAC is currently negotiating with other potential targets and will do further announcements as and when necessary.

Willem-Jan van den Dijssel
Chief Executive Officer and Chairman of the Management Board
+31 (0)20 5 705 767
Pan-European Hotel Acquisition Company N.V. (PEHAC)