Promus Companies Incorporated Announces Satisfaction of Conditions for Spin-off of Promus Hotel Corporation

Strategic Insights -

Promus Companies Incorporated (NYSE: PRI) has announced the satisfaction of the final conditions for the spin-off of its wholly owned subsidiary, Promus Hotel Corporation (NYSE: PRH). This move has been in the works since stockholders approved the spin-off on May 26, 1995. The spin-off will result in the creation of a new hotel company, which will receive one share of the new company for each two shares of The Promus Companies owned on June 21, 1995. The new company's shares will be distributed on June 30, 1995, and The Promus Companies will change its name to Harrah's Entertainment, Inc. (NYSE: HET). Trading for the new company's shares is expected to begin on or before June 19, 1995.

Key Takeaways:

  • The spin-off of Promus Hotel Corporation from Promus Companies Incorporated has been finalized, with all necessary conditions being met.
  • Stockholders will receive one share of the new hotel company for each two shares of The Promus Companies owned on June 21, 1995.
  • The new company's shares will be distributed on June 30, 1995, and The Promus Companies will change its name to Harrah's Entertainment, Inc. (NYSE: HET).
  • NationsBank, N.A. (Carolinas) and NationsBanc Capital Markets, Inc. have provided Promus Hotel with financing of up to $350 million.
  • All material third-party consents have been received, including those from the gaming regulatory authorities of the State of New Jersey and the holders of the 10 7/8 percent Senior Subordinated Notes due 2002 and the 8 3/4 percent Senior Subordinated Notes due 2000 of Embassy Suites, Inc.

Statistics:

  • The spin-off was approved by stockholders of Promus on May 26, 1995.
  • The gaming regulatory authorities of the State of New Jersey approved the spin-off on May 31, 1995.
  • The holders of a majority of the outstanding aggregate principal amount of each of the 10 7/8 percent Senior Subordinated Notes due 2002 and the 8 3/4 percent Senior Subordinated Notes due 2000 of Embassy Suites, Inc. consented to indenture amendments on an unspecified date.
  • A total of $350 million in financing will be provided to Promus Hotel.
  • The distribution of the new company's shares is expected to occur on June 30, 1995.
  • Trading for the new company's shares is expected to begin on or before June 19, 1995.

Sources:

  • PRNewswire, June 14, 1995
  • The Promus Companies Incorporated, 901-762-8629 (Ralph Berry)