8-K

 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                  Filed Pursuant to Section 13 or 15(d) of the
                        SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported): August 3, 1998


                        MERISTAR HOTELS & RESORTS, INC.
             (Exact name of registrant as specified in its charter)
 
 

DELAWARE                            1-14331                           51-0379982
(State or other jurisdiction     (Commission File                  (IRS Employer
of incorporation)                     Number)             Identification Number)
 


                          1010 Wisconsin Avenue, N.W.
                             Washington, D.C. 20007
                    (Address of principal executive offices)

      Registrant's telephone number, including area code:   (202) 965-4455

 
                                    FORM 8-K

ITEM 2.        ACQUISITIONS     

On August 3, 1998, CapStar Hotel Company ("CapStar") and American General
Hospitality Corporation ("American General") completed their previously
announced merger (the "Merger").  With the completion of the Merger, MeriStar
Hospitality Corporation (a hotel real estate investment trust) ("MeriStar
Hospitality") and MeriStar Hotels & Resorts, Inc. (a hotel management company)
("MeriStar Hotels & Resorts") began trading on August 3, 1998 on the New York
Stock Exchange under the ticker symbols MHX and MMH, respectively.

In accordance with the merger agreement (the "Merger Agreement"), CapStar
shareholders received one share of MeriStar Hospitality for each CapStar share
owned.  American General shareholders received 0.8475 shares of MeriStar
Hospitality for each American General share owned.  Immediately prior to the
Merger, CapStar shareholders received as a spin-off one share of MeriStar Hotels
& Resorts for each CapStar share owned (the "Spin-Off").  The exchange of
CapStar and American General shares for MeriStar Hospitality shares is
nontaxable.  The Spin-Off is taxable to CapStar shareholders.

Initial shareholders of MeriStar Hospitality (CapStar and American General
shareholders of record at the close of business on July 31, 1998) have received
rights ("Rights") to buy shares in MeriStar Hotels & Resorts. Each initial
shareholder of MeriStar Hospitality has received a non-transferable right to
purchase one share of MeriStar Hotels & Resorts for each six shares owned of
MeriStar Hospitality. The subscription price for the Rights is equal to $2.84
per share. The Rights expire at 5 p.m. on Monday, August 31.

As part of the Merger and Spin-Off, MeriStar Hotels & Resorts acquired 
privately-held American General Hospitality, Inc. and AGH Leasing, L.P., which
together operated and/or leased 46 of American General's 54 owned hotels and
managed 15 additional properties for third party owners, for an aggregate 
purchase price of $95 million, paid with a combination of cash and operating 
partnership units.

A copy of the press release relating to the Merger and the Spin-Off is being
filed as Exhibit 99.1 to this report.

On April 10, 1998, MeriStar Hotels & Resorts filed a Registration Statement on
Form S-1 (No. 333-49881), as amended by Amendment No. 1 filed on May 22, 1998;
Amendment No. 2 filed on June 5, 1998; Amendment No. 3 filed on June 19, 1998;
Amendment No. 4 filed on June 22, 1998; and Amendment No. 5 filed on July 23,
1998, relating to the registration under the Securities Act of 1933, as amended,
of the Rights and shares of Common Stock of MeriStar Hotels & Resorts to be
issued pursuant to the Rights offering.  Such Registration Statement is
incorporated herein by reference as Exhibit 99.2.


ITEM 5.          OTHER INFORMATION

                 See Item 2. 

ITEM 7.          FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND 
                 EXHIBITS

        (a)(b)   Financial Statements and Pro Forma Financial Information   
                 See Exhibit 99.2
               
        (c)      Exhibits
               
Exhibit          Description
- -------          -----------
               
99.1             Press Release, dated August 3, 1998

99.2             Registration Statement on Form S-1 (No.333-49881) is
                 incorporated herein by reference.

 
                                   SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:  August 14, 1998



                                        MERISTAR HOTELS & RESORTS, INC


                                        By:  /s/  JAMES A. CALDER
                                        ----------------------------------
                                        James A. Calder
                                        Chief Financial Officer

 
EXHIBIT INDEX

Exhibit    Description
- -------    -----------

99.1       Press Release, dated August 3, 1998

99.2       Registration Statement on Form S-1 (No.333-49881) is incorporated
           herein by reference.

EX-99.1

 
                                                                    EXHIBIT 99.1

For Immediate Release

Contact:

  MeriStar Hospitality Corporation
  John Emery
  Chief Financial Officer
  202/295-1000
  or
  MeriStar Hotels & Resorts, Inc.
  James Calder
  Chief Financial Officer
  202/965-4455
  or
  Daly Gray Public Relations
  Jerry Daly or Carol McCune (Media)
  609/383-1414


  CAPSTAR HOTEL COMPANY AND AMERICAN GENERAL HOSPITALITY CORPORATION COMPLETE
                                     MERGER

                  NEW MERISTAR COMPANIES BEGIN TRADING ON NYSE

WASHINGTON--Aug. 3, 1998-- CapStar Hotel Company (NYSE:CHO), a hotel ownership
and management firm, and American General Hospitality Corporation (NYSE:AGT), a
hotel real estate investment trust (REIT), completed their previously announced
merger today. With the completion of the merger, MeriStar Hospitality
Corporation (a hotel REIT) (NYSE:MHX) and MeriStar Hotels & Resorts, Inc. (a
hotel management company) (NYSE:MMH) begin trading today on the New York Stock
Exchange. Stockholders of CapStar Hotel Company and American General Hospitality
Corporation approved the merger on July 28 at stockholder meetings held in
Washington, D.C.

In accordance with the merger agreement, CapStar shareholders received one share
of MeriStar Hospitality Corporation for each CapStar share owned. Immediately
prior to the merger, CapStar shareholders received as a spin-off one share of
MeriStar Hotels & Resorts, Inc., for each CapStar share owned. American General
Hospitality Corporation shareholders received 0.8475 shares of MeriStar
Hospitality for each American General Hospitality Corporation share owned. The
exchange of CapStar and American General Hospitality Corporation shares for
MeriStar Hospitality shares is nontaxable. The spin-off of MeriStar Hotels &
Resorts is taxable to CapStar shareholders.

Initial shareholders of MeriStar Hospitality (CapStar and American General
Hospitality Corporation shareholders of record at the close of business on July
31, 1998) will receive rights to buy shares in MeriStar Hotels & Resorts. Each
shareholder of MeriStar Hospitality will receive a non-transferable right to
purchase one share of MeriStar Hotels & Resorts for each six shares owned of
MeriStar Hospitality. The subscription price for the rights will equal 95
percent of the average daily high and low prices on the NYSE of MeriStar Hotels
& Resorts from August 6 to August 12.

As part of the merger and spin-off, MeriStar Hotels & Resorts acquired
privately-held American General Hospitality, Inc. and AGH Leasing, L.P., which
together operated and/or leased 46 of American General Hospitality Corporation's
54 owned hotels and managed 15 additional properties for third party owners.

MeriStar Hospitality and MeriStar Hotels & Resorts will operate as two separate,
independent companies linked through an Intercompany Agreement. The companies
will share certain officers and board members. Paul W. Whetsell, former chairman
and CEO of CapStar, will be chairman and CEO of both companies, and Steven D.
Jorns, the previous chairman and CEO of American General Hospitality
Corporation, will be 

 
vice chairman and COO of both companies. Six independent directors will sit on
each board. In addition, the Intercompany Agreement gives MeriStar Hospitality
the right of first refusal to acquire hotels presented to the operating company
and MeriStar Hotels & Resorts the right of first refusal to lease and manage all
future hotels acquired by the REIT.

"The new REIT combines two upscale, full-service hotel portfolios in major
market locations with high barriers to entry,'' said Whetsell. ``MeriStar
Hospitality is well-positioned with strong internal growth expectations and a
prudent capital structure. The new operating company brings together two teams
which have consistently produced revenue per available room growth in excess of
industry averages and exceeded earnings expectations. As the country's largest
independent operator with over 200 hotels leased or managed, MeriStar Hotels &
Resorts has multiple avenues to increase earnings through top-line growth and
cost reduction."

"The geographic diversity and size that this combination creates already has
resulted in improved debt ratings for the REIT and corresponding cost
reductions,'' added Jorns. ``Our differentiating advantage is our ability to
produce consistent results coupled with communicating accurate expectations."

The board of directors of CapStar Hotel Company, for purposes of adjusting the
conversion price of CapStar's convertible subordinated notes and valuing the
spin-off for tax purposes, has determined that the fair market value of the
assets spun off is $3.28 per share.

As previously announced, former American General Hospitality Corporation holders
of record on July 31, 1998 will receive a pro-rated dividend from the period
July 1, 1998 through August 3, 1998 at a rate of $0.15972527 per share of common
stock, which will be paid on September 2, 1998. MeriStar Hospitality Corporation
is the nation's fifth largest hotel REIT. The REIT owns 117 principally first
class, full service hotels (including eight under contract) with 29,337 rooms in
27 states, the District of Columbia and Canada. The company owns upscale, full-
service hotels under such internationally known brands as Hilton, Sheraton,
Marriott, Westin and Doubletree.

MeriStar Hotels & Resorts, Inc. is the nation's largest independent, non-branded
hotel management company. MeriStar Hotels & Resorts leases or manages 214 hotels
(including eight under contract) with 45,087 rooms in 34 states, the District of
Columbia and Canada.

The matters in this press release include ``forward looking statements'' within
the meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and are qualified by cautionary statements contained herein
and in MeriStar Hospitality's and MeriStar Hotels & Resorts' filings with the
Securities and Exchange Commission.