SPOKANE, Washington—Red Lion Hotels Corporation, a western U.S. based owner and franchisor of midscale hotels, announced today that its board of directors has authorized Bank of America Merrill Lynch to explore strategic alternatives to maximize shareholder value, including a potential sale of the company or a strategic combination with a third party. The board has formed a Strategic Alternatives Committee comprising independent directors Ryland P. (Skip) Davis, Melvin L. Keating and Ronald Taylor. This Committee will work with Bank of America Merrill Lynch in its review.
Read "Shareholders pressure Red Lion to explore sale."
"The Red Lion Hotels board of directors and management team are committed to maximizing shareholder value," said Jon E. Eliassen, President and Chief Executive Officer of Red Lion Hotels Corporation. "We have been working with Bank of America Merrill Lynch since mid-February, and authorizing the exploration of strategic alternatives, including a potential sale of the company, demonstrates our commitment to achieving this important objective. Our board and management team are open minded about the process and intend to evaluate all options thoughtfully and carefully."
Mr. Eliassen continued, "Red Lion Hotels will continue to operate in the ordinary course and will continue to execute its strategic plan to position the company for growth and value creation, including pursuing transactions for our assets currently held for sale. We have made important progress as evidenced by the completion of the strategic sale of Seattle Fifth Avenue, which allowed the company to acquire previously leased hotels and strengthen its balance sheet with the retirement of more than $28 million in debt. We remain focused on improving profitability and are confident that the successful execution of our three-pronged strategy to reduce debt, expand our franchise program and improve the competitive position of our hotels will enhance value for all Red Lion Hotels shareholders."
The evaluation of financial and strategic alternatives will not necessarily result in any changes to the company's current business plan or any transaction or agreement. The company does not intend to disclose developments regarding the evaluation of financial and strategic alternatives unless and until a final decision is made.