MEMPHIS, Tenn. — Holiday Corp. announced Monday that it has agreed to sell as many as 28 hotels to a Chicago company for a price in excess of $400 million.
Under the agreement, Holiday's subsidiary, Holiday Inns Inc., will continue to manage the hotels through long-term management contracts with VMS Realty of Chicago.
Holiday Corp. said in a statement that the transaction should be completed by the final quarter of 1985.
According to the announcement, Holiday Corp. will receive net cash proceeds of more than $200 million if all 28 hotels are sold.
Jerry Daly, a Holiday Corp. spokesman, said the hotels involved in the deal are in 15 states. He said the company is not releasing the names of the hotels because some particulars of the arrangement are yet to be worked out.
Hotels in 15 States
Daly said the hotels are in Florida, New York, California, Massachusetts, Connecticut, Washington, Texas, Arkansas, South Carolina, Tennessee, Georgia, Michigan, Wisconsin, Illinois and Ohio.
Michael D. Rose, Holiday's chairman and chief executive, said the sale allows his company to take advantage of appreciated value of existing assets.
"It allows us to extend our hotel industry leadership by providing more funds for expansion as well as funds for stock repurchases and debt repayment while retaining management control of these hotels," Rose said.
The 28-hotel package involves about 7,800 rooms and includes 24 Holiday Inn hotels and four new Holiday Inn Crown Plaza hotels, the company said.
VMS Realty has a $4-billion real estate portfolio, of which $1 billon is in hotels.