Starwood Capital Group, Jaws Mustang Acquisition Corp announce potential merger

Investment entities affiliated with Starwood Capital Group and Jaws Mustang Acquisition Corp (NYSEA: JWSM), a special purpose acquisition company, have entered into a non-binding letter of intent for a potential business combination. Should this merger proceed, the newly combined public entity is slated to be listed on a national securities exchange, marking a significant development in the hospitality and real estate sectors.

Highlights of the Proposed Business Combination

– The Initial Portfolio includes the 1 Hotels properties in Manhattan and Brooklyn, and the De Vere Portfolio in the United Kingdom, comprising a total of ten properties with a notable emphasis on environmental sustainability and luxury.

– 1 Hotels, created by Barry Sternlicht, Chairman and CEO of Starwood Capital Group, integrates environmental sustainability into luxury lodging, featuring properties designed with eco-friendly materials and practices.

– The De Vere Portfolio encapsulates a collection of historic country estates and houses in the UK, offering luxury accommodation with a blend of heritage and modernity.

Details of the Initial Portfolio and Financial Outlook

– The Initial Portfolio earned a Net Operating Income (NOI) of $52 million for the year ended December 31, 2023, and is projected to earn $62 million for the year ending December 31, 2024.

– Post-merger, the combined public company aims to expand its holdings by acquiring additional hotel properties, including 1 Hotels.

Starwood Capital Group and Jaws Mustang Acquisition Corp are working towards finalizing their definitive business combination agreement in the upcoming weeks. The transaction is subject to customary closing conditions, including investor consents and regulatory approvals. Santander US Capital Markets LLC is acting as the equity capital markets advisor and financial advisor to Jaws.

The proposed business combination between Starwood Capital Group’s affiliated investment entities and Jaws Mustang Acquisition Corp represents a strategic move that could reshape the luxury hotel landscape. This merger not only signifies a robust investment in sustainability within the hospitality industry but also aligns with the growing trend of ESG (Environmental, Social, and Governance) investing. By leveraging the strong brand presence of 1 Hotels and the historic charm of the De Vere Portfolio, the combined entity is well-positioned to cater to the increasing demand for luxury accommodations that prioritize environmental stewardship and heritage.