in connection with a potential sale of, or other significant strategic transaction involving, CorePoint. CorePoint has also worked with Simpson Thacher & Bartlett LLP (Simpson
Thacher) from time to time since the completion of the spin-off from La Quinta Holdings Inc. CorePoint discussed various matters and the process that led to the proposed merger with
representatives of Simpson Thacher throughout the course of the events in 2021 described below.
|
B. |
The third full paragraph on page 36 (such paragraph beginning with Throughout the first half of
2021
) of the proxy statement is hereby amended and restated to read as follows (supplemented disclosure is bolded and underlined): |
Throughout the first half of 2021, CorePoint continued to pursue the completion of its
ongoing non-core disposition program, which it had commenced in March 2019, with respect to the sale of its non-core hotel properties as identified
in a strategic review of its portfolio. During this period, the Board and the Capital Committee of the Board (the Capital Committee), respectively, held bi-weekly regularly scheduled
update calls during alternating weeks, with representatives of CorePoint management in attendance, to discuss the status of the disposition program and related matters concerning the operations and strategy of CorePoint. Also, from time to time
throughout the first half of 2021, representatives of CorePoint management and the Capital Committee had a number of informal discussions with representatives of J.P. Morgan and HWE, respectively, related to the state of the lodging industry
generally, certain of CorePoints peer companies, CorePoints disposition strategy and potential strategic alternatives that CorePoint might pursue. The Capital Committee was established by the Board on
September 11, 2018, consistent with the recommendation of the Nominating and Corporate Committee of the Board, with the purpose, structure and authority and the qualifications and criteria for membership as set forth
in the charter of the Capital Committee as previously publicly disclosed by CorePoint, which purpose includes, among other things, providing assistance to the Board with respect to its oversight of investments, dispositions, capital deployment, the
performance and valuations of CorePoints real estate assets and portfolios, and periodic review of CorePoints investment policies, strategies, programs and procedures.
|
C. |
The fifth full paragraph beginning on page 37 (such paragraph beginning with On June 21, 2021,
the Board
) and continuing onto page 38 of the proxy statement is hereby amended and restated to read as follows (supplemented disclosure is bolded and underlined and deleted language is stricken through): |
On June 21, 2021, the Board held a telephonic meeting, with representatives of CorePoint management and representatives of J.P. Morgan and Simpson
Thacher in attendance. Representatives of CorePoint management presented to the Board three standalone forecasts for CorePoint, consisting of a base plan and two growth plans, all of which had been prepared by CorePoint management and reviewed on
June 1, 2021 with various members of the Board and representatives of J.P. Morgan. The Board reviewed these standalone forecasts with representatives of J.P. Morgan and representatives of CorePoint management. All three forecasts assumed that
CorePoint would sell all of its properties other than the CorePoint Core Portfolio, and the two growth plans, which were otherwise based on substantially the same underlying assumptions for the future performance of the CorePoint Core
Portfolio as the base plan, also further assumed that CorePoint would shift from its current strategy to pursuing a growth strategy with respect to the core portfolio by using the use of debt capital
following these dispositions to acquire additional core properties. Members of the Board discussed with representatives of CorePoint management the forecasts presented, including the potential value creation opportunity of each of these plans, key
underlying assumptions utilized in preparing the plans and perspectives with respect to market trends. The Board also discussed potential next steps in connection with the potential evaluation of strategic alternatives, as well as the potential
impact of the IRS Matter and the management relationship with Wyndham on any such strategic alternatives.
|
D. |
The first full paragraph on page 46 (such paragraph beginning with At this meeting, representatives of
J.P. Morgan
) of the proxy statement is hereby amended and restated to read as follows (supplemented disclosure is bolded and underlined): |
At this meeting, representatives of J.P. Morgan then reviewed with the Board J.P. Morgans financial analysis of the potential transaction. Following
further discussion, representatives of J.P. Morgan then rendered its oral opinion to the Board to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the
review undertaken by J.P. Morgan in preparing its opinion, the per share merger consideration of $15.65 to be paid to the holders of CorePoint common stock in the merger was fair, from a financial point of view, to such holders, which was
subsequently confirmed by delivery of J.P. Morgans written opinion to the Board. The Board did not ask HWE to render an opinion regarding the fairness of the consideration paid in the merger to the Board in connection with HWEs
engagement by CorePoint relating to the merger. The Board considered the fact that the closing price of CorePoint common stock had increased significantly since CorePoints public announcement of its strategic alternatives
process and that the indications of interest received from all three parties reflected a discount to the most recent closing price per share of CorePoint common stock, but the Board noted that the per share merger consideration of $15.65 to be paid
to the holders of CorePoint common stock in the merger represented a premium of approximately 42% to CorePoints closing stock price on July 13, 2021, the last trading day prior to the CorePoints public announcement of its strategic
alternatives process. The Board also considered that, aside from their interests as CorePoint stockholders, CorePoints directors and executive officers have interests in the merger that may be different from, or in addition to, the interests
of other CorePoint stockholders generally, as described in more detail in The MergerInterests of CorePoints Directors and Executive Officers in the Merger beginning on page 61 of this proxy statement. Representatives of
CorePoint management discussed with the Board and representatives of Simpson Thacher the fact that there had been no discussions during the course of the process leading up to the proposed merger between members of CorePoint management and
representatives of Highgate/Cerberus or Party A or other potential acquirors regarding potential employment or compensation arrangements for members of CorePoint management following the consummation of a potential transaction with CorePoint.
Representatives of Simpson Thacher then reviewed with the Board their duties under applicable law and the terms of the merger agreement. At the conclusion of the meeting, the Board met in executive session, during which Mr. Cutaia noted, as
previously reported to the Board, that neither of the Blackstone parties had a need to sell its shares in the near-term, that their objective had been and continued to be for CorePoint to pursue whatever strategy the Board believed would maximize
CorePoints value for all of CorePoints stockholders, and that each believed that the proposed transaction