Hotel magnate ready to deal F.C. property

John Q. Hammons, developer of the proposed Embassy Suites located at The Ranch and owner of the University Park Holiday Inn in Fort Collins, has agreed to merge his company with Barcelo Crestline Corp.
As planned, Barcelo Crestline will acquire all of the outstanding shares of Class A Common Stock of John Q. Hammons Inc. (AMEX: JQH) for $13 per share – a deal worth at least $63.4 million. According to Hoover’s Online, the John Q. Hammons Inc. has 4.89 million shares outstanding. The merger is expected to finalize in January.
The transaction, once complete, will create Barcelo Hammons Hotels and Resorts Inc., a private company that would own 46 hotels in 20 states. The company would also have management contracts to operate 200 hotels.
The merger is not expected to impact construction of the proposed $35-million hotel-convention center in Loveland, according to a John Q. Hammons Inc. executive. Hammons recently struck a deal with Larimer County to build a 250-suite Embassy Suites and an adjoining 80,000-square-foot convention center at the fairgrounds, known as The Ranch.
Nor is the Hammons-Barcelo merger expected to affect the 258-room University Park Holiday Inn in Fort Collins, which recently announced plans to change its flag to Hilton in 2005. Hammons intends to spend about $9 million on the name change and associated remodeling.
“The University Park Holiday Inn change will not be affected by the merger,´ said Veanne Stocking, the Fort Collins-based regional vice president for John Q. Hammons Hotels Inc.
Stocking said the merger will help finance continued expansion in the marketplace. Barcelo Crestline has significant equity interests in several upscale hotels and is parent to Crestline Hotels & Resorts, Inc., which is among the nation’s 15 largest independent hospitality management companies. Barcelo Crestline does not manage any properties in Colorado.
In the merger announcement, Barcelo Crestline said it entered into an agreement with John Q. Hammons, in which he agreed to support the acquisition. He will participate by exchanging all of his other equity interests in John Q. Hammons L.P. and John Q. Hammons Inc. for interests in Barcelo Hammons Hotels and Resorts Inc. Hammons owns 76 percent of the equity interests in the two companies and 77 percent of the voting power.
The merger will help ensure the future direction of the hotel company. Hammons is 85, and the company needed to prepare for a time without him.
“We are pleased that this transaction will allow John Q. Hammons Hotels and Resorts to privately continue development of its hotel and resort portfolio across the United States,” Hammons said in the merger announcement.
Still, the merger is not going smoothly. A stockholder has filed a complaint in the Court of Chancery of the State of Delaware against the company and its board of directors. The complaint alleges the purchase price offered by Barcelo Crestline is inadequate and that the members of the company’s board of directors have breached their fiduciary duties in connection with the proposed transaction.
Company officials say the complaint against them is without merit and they intend to vigorously contest the lawsuit.
“This merger establishes how the company will see its self in the future,” Stocking said.

on Facebook on LinkedIn