ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, January 1, 1997 TAG: 9701020045
SECTION: BUSINESS PAGE: B-8 EDITION: HOLIDAY
DATELINE: PHOENIX
SOURCE: Bloomberg Business News
Doubletree Corp. will acquire Renaissance Hotel Group NV for $850 million, furthering its expansion into more profitable, upscale hotels, and overseas, where there's less competition.
The purchase announced Tuesday was Doubletree's second in two months. It will add more than 140 Renaissance, Ramada International and New World hotels to the chain that operates Hotel Roanoke & Conference Center. That gives it a total of about 370 properties with 100,000 rooms.
``This makes them a top-notch competitor,'' said Harry Venezia, an analyst at Raymond James & Associates.
Doubletree's co-chairmen, Richard Ferris, the former head of United Airlines, and Peter Ueberroth, past commissioner of Major League Baseball, have spearheaded a vigorous expansion to compete against hoteliers such as Hilton Hotels Corp. and Marriott International Inc., analysts said.
The result is a company whose profits could rise more than 25 percent annually in the next few years, they said.
The agreement calls for Doubletree to pay $8 cash and 0.4105 share of its stock for each Renaissance share, or about $25.30 a share based on a Doubletree price of $42.15. The purchase price includes the assumption of $70 million in debt.
Shares of Doubletree fell $2.50 on Tuesday to $45 in trading of 877,300, more than three times the three-month daily.
Doubletree has sold stock to the public four times, including its initial public offering in 1994. Last month, it sold 5.6 million shares at $39.25 each to raise $220 million.
With the help of that cash, Doubletree paid $1.2 billion for Red Lion Hotels Inc., which has 56 hotels. Renaissance and Red Lion almost doubled Doubletree's hotel chain.
``They have been the most aggressive brand in the U.S.,'' Venezia said.
LENGTH: Short : 43 linesby CNB