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December 21, 2009

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Jin Jiang buys major US hotel group

SHANGHAI Jin Jiang International Hotels Co Ltd is to acquire Interstate Hotels & Resorts Inc, the largest independent hotel management company in the United States, through a new joint venture with the US-based Thayer Lodging Group, Jin Jiang announced yesterday.

Jin Jiang, the leading hotel operator in China with a portfolio of hotels across the country, signed an agreement with Thayer Lodging to form the Hotel Acquisition Co LLC (HAC) to merge Interstate Hotels & Resorts Inc and Interstate Operating Co and turn them into wholly owned subsidiaries of HAC.

HAC will acquire all outstanding common stock and operating partnership units in Interstate. The acquisition involves a cash investment of US$75.3 million, at US$2.25 per share, and assumption of all outstanding debts. The transaction is valued at around US$307 million.

Jin Jiang said the merger is expected to close in the first quarter of 2010, pending Interstate's shareholder approval. Jin Jiang has obtained approval from relevant Chinese government departments.

Tang Muliang, vice president of Jin Jiang International, said the corporation had been looking for an opportunity to expand overseas since 2003.

Interstate manages 232 hotels and resorts with a total of 46,000 rooms in the US, Canada, Mexico, Russia, India, Belgium, Ireland and England. The company also owns interests in 56 properties, including six wholly owned assets.

Jin Jiang Hotels operates 493 hotels, providing close to 82,700 rooms. It was ranked 13th in the world in terms of number of rooms, according to HOTELS Magazine, the official publication of the International Hotel & Restaurant Association.

Yu Minliang, chairman of Jin Jiang Hotels, said: "Interstate has a global reputation as a world-class, independent hotel operator. This acquisition significantly accelerates our ability to expand internationally, giving us immediate access to a worldwide platform."

Thayer's co-Chairman Leland Pillsbury said: "Interstate offers a unique platform with in-depth industry expertise, international operations, and scope of experience gained over 50 years, along with a stellar reputation as a first-rate operator."

Thayer Lodging Group is an investor that works with major brands to acquire and reposition hotels.


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