Hammons Hotels, Barcelo continue negotiations

Company officials announced Dec. 29 that Hammons Hotels would negotiate exclusively with Barceló through January. Hammons Hotels Vice President Scott Tarwater said Barceló is working on making sure all of the legal technicalities are taken care of, including visiting the hotels involved in the deal.

“Simultaneously there are some legal parts of the puzzle being put together, with hopefully all of that coming together in the last week of January for a final review by the special committee, the board of directors and Barceló to go forward for the next step,” Tarwater said.

Barceló Crestline President and CEO Bruce Wardinski said the two companies are progressing toward a deal.

“Things are moving very well and we’re very hopeful and expect to complete all of our work by the end of the month. It’s a great organization, the assets are great and we’ve encountered no surprises at this point,” Wardinski said.

The next hurdle, according to Tarwater, is structuring a complete deal that Hammons Hotels and Barceló can agree on, as well as notifying Hammons Hotels’ stockholders and the appropriate authorities with the Securities and Exchange Commission.

Barceló’s original deal, which would have paid Hammons Hotels’ stockholders $13 per share, was rejected Dec. 7 by a Hammons Hotels special committee citing unsatisfactory pricing. Hammons Hotels stock (AMEX: JQH) closed Jan. 11 at $20.34 a share, partly due to jumps in the stock’s price following both the announcement that the committee rejected Barceló’s initial offer of approximately $64 million and the announcement that the two companies would negotiate exclusively. In late December, the stock reached an all-time high of $20.68.

Additionally, a lawsuit filed by a Hammons Hotels stockholder who claimed that Barceló’s offer was less than the company was worth, has been rescinded by the shareholder who filed it, according to Tarwater.

Meanwhile, Hammons Hotels founder and CEO John Q. Hammons has announced plans to develop a new Residence Inn by Marriott near the Kansas City International Airport. Construction of the four-story, 150-suite hotel is scheduled to begin this summer with a grand opening in 2006. Hammons would own the property and Hammons Hotels would manage it.

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