Eagle Hospitality Properties Trust 8-K 2007
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 31, 2007
EAGLE HOSPITALITY PROPERTIES TRUST, INC.
(Exact name of registrant specified in its charter)
100 E. RiverCenter Blvd., Suite 480
Covington, KY 41011
(Address of principal executive offices, zip code)
Registrants telephone number, including area code: (859) 581-5900
(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:
On July 31, 2007, Eagle Hospitality Properties Trust, Inc. (Eagle or the Company) agreed on a settlement in principle (the Settlement) with the plaintiff in the previously announced action in the Commonwealth of Kentucky Kenton Circuit Court brought by the City of Pontiac General Employees Retirement System, on behalf of itself and on behalf of all holders of the Companys stock (excluding the named defendants and their affiliates). The Settlement remains subject to appropriate documentation by the parties, approval by Eagles board of directors and approval by the court.
As part of the Settlement, the Company agreed to make the disclosures set forth in this current report on Form 8-K. Information concerning the proposed merger is set forth in, or incorporated by reference into, Eagles proxy statement dated July 3, 2007 (the definitive proxy statement). The definitive proxy statement is supplemented by, and should be read as part of and in conjunction with, the information filed in this current report on Form 8-K.
The discussion below expands on the discussion in the section of the definitive proxy statement titled Opinion of Morgan Stanley & Co. Incorporated, beginning on page 27 of the definitive proxy statement.
In connection with rendering its opinion to the special committee, Morgan Stanley reviewed certain financial projections prepared by the management of the Company. Eagle does not as a matter of course make public any projections as to future financial performance or earnings with respect to periods after its then-current fiscal year, and the projections set forth below are included in this current report on Form 8-K only because this information was provided to Morgan Stanley in connection with rendering its opinion to the special committee. Eagle does not as a matter of course prepare five-year projections.
The projections set forth below were not prepared with a view to public disclosure or compliance with published guidelines of the SEC, any state securities commission or the American Institute of Certified Public Accountants regarding preparation and presentation of prospective financial information. The Companys internal financial forecasts, upon which the projections were based, are subjective in many respects. The projections reflect numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, all of which are difficult to predict and beyond Eagles control. The projections also reflect numerous estimates and assumptions related to the Companys business (including with respect to the growth and viability of certain segments of the Companys business) that are inherently subject to significant economic, political and competitive uncertainties, all of which are difficult to predict and many of which are beyond Eagles control. There can be no assurance that the assumptions made in preparing the projections set forth below will prove accurate, and actual results may be materially greater or less than those contained in the projections set forth below. In addition, the projections have not been revised to reflect events that have occurred subsequent to their preparation, and thus, reliance should not be placed on these projections.
The inclusion of the projections in this current report on Form 8-K should not be regarded as an indication that Eagle, EHP Operating Partnership, Parent, Merger Sub, Morgan Stanley or their respective officers, directors and other affiliates consider such information to be an accurate prediction of future events or necessarily achievable. None of Eagle, EHP Operating Partnership, Parent, Merger Sub, Morgan Stanley or their respective officers, directors and other affiliates has made any representations regarding such projected financial information. In light of the uncertainties inherent in forward-looking information of any kind, Eagle cautions you against reliance on such information. Neither Eagle nor EHP Operating Partnership nor their respective officers, directors or other affiliates intend to provide updated or revised projections to reflect the circumstances existing after the date when prepared or to reflect the occurrence of future events, except to the extent required by law. See Cautionary Statements Regarding Forward-Looking Statements below.
In the definitive proxy statement, Eagle disclosed certain non-public financial projections prepared by Eagles senior management for the fiscal year ending December 31, 2007 and provided to Parent in the course of discussions between Eagle and Parent. Management prepared the projections contained in the definitive proxy statement in April 2007. Management prepared the five-year projections set forth in this current report on Form 8-K in January 2007, and management has not prepared any subsequent five-year projections. Morgan Stanley used the five-year projections set forth in this current report on Form 8-K in connection with Morgan Stanleys calculation of unlevered free cash flows through 2011. At the direction of management, Morgan Stanley included the portion of the five-year projections set forth below related to the fiscal year ending December 31, 2007 in confidential offering materials provided to bidders who had signed confidentiality agreements in connection with the Companys review of strategic alternatives.
The five-year projections set forth in this current report on Form 8-K were prepared by management by increasing the projections for Hotel EBITDA, Corporate G&A and CapEx prepared by Eagles senior management in January 2007 for the fiscal year ending December 31, 2007 by an inflation factor of 3.5% for each successive fiscal year through the fiscal year ending December 31, 2011.
Cautionary Statement Regarding Forward-Looking Statements
Information both included and incorporated by reference in this current report on Form 8-K may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on various assumptions and describe Eagles future plans, strategies, and expectations, are generally identified by use of words such as intend, plan, may, should, will, project, estimate, anticipate, believe, expect, continue, potential, opportunity, and similar expressions, whether in the negative or affirmative. The Company cannot guarantee that it actually will achieve these plans, intentions or expectations, including completing the merger on the terms summarized in the definitive proxy statement. All
statements regarding Eagles expected financial position, business and financing plans are forward-looking statements.
Except for historical information, matters discussed in this current report on Form 8-K are subject to known and unknown risks, uncertainties and other factors which may cause the Companys actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
Factors which could have a material adverse effect on Eagles operations and future prospects include, but are not limited to:
These risks and uncertainties, along with the factors discussed under Item 1A.Risk Factors, Managements Discussion and Analysis of Financial Conditions and Results of Operations, Business and Properties in the Companys Annual Report on Form 10-K for the year ended December 31, 2006 (see Where You Can Find Additional Information beginning on page 64 of the definitive proxy statement), should be considered in evaluating any forward-looking statements contained in this current report on Form 8-K. All forward-looking statements speak only as of the date of this current report on Form 8-K. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on the Companys behalf are qualified by the cautionary statements in this section.
Important Additional Information Regarding the Merger
On July 3, 2007, the Company filed with the SEC a definitive proxy statement in connection with the proposed merger. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE COMPANY, THE PURCHASER AND THE MERGER. The definitive proxy statement and other relevant materials (when they become available), and any
other documents filed by the Company with the SEC, may be obtained free of charge at the SECs web site at www.sec.gov. The definitive proxy statement and other relevant material (when they become available) may also be obtained free of charge by calling the Companys Investor Relations Department at (859) 581-5900 or on the Companys website.
Participants in Proxy Solicitation
The Company and its directors, executive officers and other members of its management and employees may be deemed participants in the solicitation of proxies from its shareholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of the Companys participants in the solicitation, which may be different than those of the Companys shareholders generally, by reading the definitive proxy statement, as well as information included in the Companys proxy statements and Annual Reports on Form 10-K, previously filed with the SEC.
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 thereunto duly authorized.