Trusts Agree in Principle to Buy Hotel Properties

Hotel Investors Corp. and its operating company, Hotel Investors Trust, both of Chevy Chase, Md., have agreed in principle to acquire Woodland Hills-based Hotel Properties in an exchange of stock valued at more than $90 million, Hotel Properties reported. The companies are all real estate investment trusts.

No date was set for completion of the deal, which hinges on approval by the three boards.

Hotel Properties, with rental revenue for 1985 of nearly $8.4 million, has an interest in 20 hotels and motels in nine states. Hotel Investors Corp. and Hotel Investors Trust, with combined sales for the last fiscal years ended Aug. 31 of $33.3 million, have interests in 21 hotels in 15 states.

The deal calls for John F. Rothman, president and chief executive of Hotel Properties, to become president and chief executive of Hotel Investors Trust and chairman of Hotel Investors Corp. Hotel Properties will be absorbed by its new owners and will no longer operate as a separate unit.

David J. Callard, director of Hotel Investors Corp. and chairman of Hotel Investors Trust, and Curt W. Schneider, a director, president and chief executive of Hotel Investors Corp., will retain their posts.

Under the agreement, each Hotel Properties share would be exchanged for one unit consisting of a share of Hotel Investors Corp. and a share of Hotel Investors Trust. Hotel Properties warrants would become warrants to buy Hotel Investors units on a one-for-one basis.

Hotel Properties recently reported that its profit almost doubled for the first quarter ended March 31 from the corresponding period in 1985. The company reported net income of nearly $1.2 million, or 29 cents a share. Revenue for the period rose 31%, to $2.3 million.

Rothman attributed the company’s improved performance to the operation this year of properties that were being renovated in 1985.