Mainland firm
buying Aston Hotels

A Memphis firm founded
last year is paying $29.5 million
for the isle hotel company

By Russ Lynch
Star-Bulletin

Aston Hotels & Resorts, one of Hawaii's oldest hotel companies, is being sold to a Memphis, Tenn.-based company for $29.5 million.

Aston's principal owner, Andre S. Tatibouet, will get 1.7 million shares of the new company.

In a filing with the Securities & Exchange Commission, Vacation Properties International Inc. registered a planned $69.7 million initial public stock offering.

The company is headed by Chairman and Chief Executive David C. Sullivan, a former executive with Promus Hotel Corp.

The company is acquiring 14 businesses that own and manage resort hotels, condominiums and rental homes, with Aston as the largest acquisition.

Tatibouet will remain chairman of Aston, operating the company as a subsidiary of Vacation Properties International.

He said today that there will be no changes in staff or any other aspect of the Hawaii operation.

"Nothing will change here in Hawaii at all except that we will be part of a national company," said Tatibouet, who has been appointed a director of Vacation Properties.

He said the Vacation Properties' interest in Aston was not the first he's had from potential buyers.

"I have had innumerable people knocking at my door, but I wanted to be sure that I was linking up with people that I felt I could be very comfortable with," he said.

The SEC filing describing the issue of 5.8 million shares of Vacation Properties contains the first public disclosure of the operating figures of Aston, which as a privately held company was not required to make its financial results public.

It shows that Aston last year had revenues of $19.6 million and an operating profit of $5.1 million.

Aston was founded in 1967 by the Tatibouet family, which has been in the hotel business in Hawaii since Andre Tatibouet's parents opened a small Waikiki hotel in 1948.

Tatibouet personally owes Aston $7.3 million and four hotel companies he controls owe Aston a total of $17.4 million, the SEC document shows. Tatibouet will pay off those loans as part of the transaction.

Aston manages 29 resort properties with 4,800 rental units, including more than 1,500 hotel rooms, most of them in Hawaii.

Vacation Properties is acquiring another Hawaii business as well, Maui Condominium & Home Realty, which manages condominiums in Wailea and Kihei and had revenues of $1.4 million last year. The purchase price for that company is $1.4 million plus 167,000 Vacation Properties shares.

The company's shares are being underwritten by Salomon Smith Barney, Nationsbanc Montgomery Securities and Furman Selz. Tatibouet said the offering is expected to take place in about a month. Bloomberg News reported that the initial offering price of the shares will be between $11 and $13.

Aston is Hawaii's second-largest privately owned hotel operator, after Outrigger Hotels & Resorts.

Vacation Properties International was formed in September but will have no operations until it completes the acquisition of Aston and the other companies.

After the acquisitions it will be operating about 11,000 units from Canada and the East Coast to Hawaii and out into the Pacific.