Interstate Hotels & Resorts Sells for $307M Cash

(MoneyWatch)  A joint venture between the Thayer Hotel Investors and Shanghai Jin Jiang International Hotels Co. Ltd. will buy Interstate Hotels & Resorts for $307 million in an all-cash deal. Interstate owns and manages 232 hotel properties in 37 states and in countries including Belgium, Russia, Canada and India.

The joint venture, called Hotel Acquisition Company, is a 50-50 partnership between Annapolis, Md.-based Thayer and the largest hotel group in China. According to reports, Shanghai Jin Jiang has been looking to expand since it entered into the partnership with Thayer five months ago.

"This acquisition significantly accelerates our ability to expand internationally, giving us immediate access to a worldwide platform," Yu Minliang, Jin Jiang's Chairman and executive director told the International Business Times.
Interstate, which was suffering under a large debt load, seemed to express relief at the sale. "The hotel industry remains in deep recession, and we believe this transaction offers the highest and best value to our shareholders," Interstate chief executive Thomas Hewitt told Reuters.

(Despite reports that shareholders are receiving $2.25 per share, at least one law firm is researching a potential shareholder lawsuit, saying that Interstate has a book value of more than $4.49 a share.)

To me, the sale signals the beginning of the sales and deals we can expect in 2010, with more international buyers entering into the market. The United States is still a good value and most foreign hotel operators are less encumbered with debt. The emerging enterpreneurs are looking to expand their footprint globally and how can they resist such fire sale prices?The lack of traditional lending will also lead to more U.S-foreign partnerships, helping fuel these global transactions.