Marriott International
Agrees to Buy 32 Hotels

Marriott International Inc. said it agreed to pay $1.45 billion to acquire 32 hotels from CTF Holdings Ltd., a pact that effectively ends nearly three years of litigation between the companies.

CTF, an affiliate of New World Development Co. of Hong Kong, filed suit against Marriott in 2002 alleging that it secretly pocketed millions of dollars in kickbacks and fees relating to purchasing agreements with outside vendors. CTF owns hotels operated under such Marriott brands as Renaissance Hotels & Resorts and Courtyard by Marriott.

The CTF suit was one of a number of high-profile actions brought by hotel owners against management companies such as Marriott, based in Bethesda, Md. The suits demanded that management companies give more detailed financial information to owners about specific properties, as well as a greater share of profits.

Marriott will sell five of the 32 hotels to real-estate investment trust Sunstone Hotel Investors Inc. for $419 million and eight hotels to Walton Street Capital LLC for $578 million. Marriott will pay $455 million for the remaining 19 hotels and plans to sign long-term agreements with Sunstone and Walton to manage their 13 hotels.

The purchase is a setback for Marriott, which has tried in recent years to reduce the number of company-owned hotels and focus primarily on management. Marriott said it hopes to turn around and sell most of the 19 properties that it isn't already unloading to Sunstone and Walton.

Marriott also will restructure management agreements at 29 Renaissance hotels leased by CTF, mostly in Europe. Marriott will manage 16 of the hotels under new long-term contracts while it will allow CTF to end its management contracts with Marriott at 13 hotels in Europe.

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