Prime Hospitality to repay bank debt as part of buyout

By Sara Rosenberg

New York, Aug. 19 - Prime Hospitality Corp. plans to repay all of its bank debt in connection with The Blackstone Group's acquisition of the company, management said during a company conference call on Thursday.

The company also plans to solicit consents and begin a tender offer for its existing 8 3/8% senior subordinated notes due 2012 as part of the buyout.

Blackstone has secured a financing commitment in the amount of $680 million from Bank of America to help support the transaction and has committed $172 million in equity. This financing will be raised through the commercial mortgage-backed securities market.

Under the transaction agreement, Blackstone will acquire Prime Hospitality for $12.25 per share. The total value of the transaction, including debt, is more than $790 million. The transaction is subject to shareholder approval and other customary conditions and is expected to be completed during the fourth quarter.

Prime Hospitality is a Fairfield, N.J.-based lodging company.

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