DALLAS — Hotel investor FelCor Lodging Trust Inc. is buying hotel management concern MeriStar Hospitality Corp. for about $1.1 billion in cash and stock in a deal that would create one of the biggest hotel companies.
FelCor is the largest owner of Embassy Suites, Crowne Plaza, Doubletree and Holiday Inn hotels, while Meristar is a big owner of Hilton and Sheraton hotels.
The deal announced Thursday would create a company with 299 properties and combined revenues of $2.9 billion.
FelCor is a real estate investment trust, based in the Dallas area, and it owns 186 hotels with almost 50,000 rooms and suites concentrated primarily in the upscale and full-service segments.
MeriStar Hospitality, based in Washington, D.C., has 113 hotels in 27 states and the District of Columbia.
“We’ll be kind of an index fund for the hotel industry,” Thomas J. Corcoran Jr., FelCor’s president and chief executive officer, said in a statement. “We’ll have a major presence in 39 states.”
MeriStar officials valued the transaction at about $22 a share in stock and cash. MeriStar Hospitality stockholders would exchange each share for 0.784 share of FelCor, or stock currently valued at $17.37 a share, plus $4.60 a share in cash.
Shares of MeriStar fell 15 cents to close at $21.30 per share in trading Thursday on the New York Stock Exchange. FelCor shares fell 30 cents to to close at $21.80.
FelCor is also assuming $1.6 billion in debt in the deal.
