Starwood to Buy Westin Resort in Rancho Mirage
Starwood Lodging Trust on Monday said it will buy Westin Mission Hills Resort in Rancho Mirage from closely held Takanaka Corp. for about $118 million.
Starwood had already agreed to acquire the property’s management firm, Westin Hotels & Resorts, for $1.57 billion in cash, securities and assumed debt.
For the record:
12:00 a.m. Nov. 26, 1997 For the Record
Los Angeles Times Wednesday November 26, 1997 Home Edition Business Part D Page 3 Financial Desk 1 inches; 18 words Type of Material: Correction
Takenaka Corp.--Due to an error in a press release, the name of Takenaka Corp. was misspelled in Tuesday’s Business section.
The Phoenix-based company has been one of the most aggressive buyers in a record year for hotel acquisitions. Two weeks ago, it won the right to purchase ITT Corp. of New York, which operates the Sheraton chain, for $13.7 billion to become the world’s largest hotel company.
“It’s a typical Starwood transaction,” said Tom Burnett, founder of research firm Merger Insight. “It fits right in with their expansion plans.”
The acquisition boom has been led by so-called paired-share real estate investment trusts such as Starwood.
Like other real estate trusts, paired-share REITs are exempt from federal corporate income tax if, among other things, they pay 95% of their income to shareholders as dividends. Unlike other REITS, however, they are allowed to operate the businesses that sit on the land. Only five paired-share REITs exist, all established before legislation in the early 1980s prevented the formation of others.
The Westin Mission Hills Resort is a 512-room, four-star hotel with two 18-hole golf courses, a health spa, tennis courts and 75,000 square feet of meeting space.
Takanaka, a Japanese company, will remain a minority party. The sale is expected to close in December.
Starwood’s shares fell 88 cents to close at $52.56 on the New York Stock Exchange.
