MeriStar Hotels & Resorts
said Friday it is withdrawing plans to merge with
American Skiing Company
due to adverse economic conditions and both companies' inability to meet the transaction's financial obligations.
Niether company will incur termination fees.
MeriStar, which is based in Washington, D.C., said it is confident first-quarter earnings remain in line with internal forecasts. The company, which operates hotels under the Hilton, Sheraton, Westin, Radisson, Marriott, Doubletree, Embassy Suites, and Holiday Inn brands, did not release specific earnings forecasts.
American Skiing Company runs 9 ski resorts, develops mountainside real estate and is based in Bethel, Maine.
New York Stock Exchange
trading, shares of MeriStar dropped 13 cents, or 7.2%, to $1.67 a share, while shares of American Skiing Company gained 41 cents, or 36.3%, to $1.54 a share.