Friday, October 13, 2000

Edgecliff faces competitor in bid for hotel chain

By Mike Boyer
The Cincinnati Enquirer

        A Northern Kentucky firm trying to acquire Lodgian Inc., an Atlanta-based hotel operator, on Thursday said it was undaunted by the disclosure that the chain was considering a rival bid.

        “At this point, we fully intend to propose an offer for the company, subject to normal due diligence,” said Joseph Marquet, chief financial officer for Edgecliff Holdings Inc.

        Edgecliff, controlled by Northern Kentucky businessman William Yung, is Lodgian's largest shareholder and has been attempting to acquire the operator of mainly Marriott franchises for about a year. Mr. Yung is also president of Columbia Sussex Corp., a rival hotel operator in Fort Mitchell.

        Lodgian postponed its annual shareholders meeting scheduled for Thursday until Oct. 20. Lodgian said the delay was so that shareholders could consider a cash offer of $4.50 a share, or about $127 million, from two real estate funds managed by Goldman Sachs Co.

        Edgecliff has been waging a proxy solicitation to elect its own slate of directors to Lodgian's board.

        Mr. Marquet said the meeting postponement reflected fears of Lodgian's management that Edgecliff's directors' slate would be elected by shareholders.

        Edgecliff previously made two proposals to acquire Lodgian: a $6.50-a-share offer that was subsequently reduced to $5.75 a share after Lodgian reported fourth-quarter losses of $70 million.

        Lodgian's shares have fallen more than 40 percent this year. Thursday, the shares closed up 50 cents at $3.37 1/2.


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