Exhibit 8.1
SIDLEY & AUSTIN
LETERHEAD
August 23, 1999
Starwood Hotels & Resorts Worldwide, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger dated as of July 18,
1999, as amended August 16, 1999, (the "Agreement") among Starwood Hotels &
Resorts Worldwide, Inc., a Maryland corporation ("Parent"), Fire Acquisition
Corp., a Florida corporation and a wholly-owned subsidiary of Parent ("Sub"),
and Vistana, Inc., a Florida corporation (the "Company"), which provides for
the merger (the "Merger") of the Company with and into Sub, with Sub as the
surviving corporation and the common shareholders of the Company becoming
shareholders of Parent, all on the terms and conditions therein set forth,
the time at which the Merger becomes effective being hereinafter referred
to as the "Effective Time." Capitalized terms used but not defined herein
have the meanings specified in the Agreement.
As provided in the Agreement, at the Effective Time, by reason of the
Merger: (i) each then issued and outstanding share of common stock, par value
$.01 per share, of the Company ("Company Common Stock"), not owned by Parent,
the Company or their respective wholly-owned Subsidiaries shall be converted
into (A) a fraction of a share of common stock, par value $.01 per share, of
Parent ("Parent Common Stock") and a fraction of a class B share, par value $.01
per share ("Class B Shares" and, when attached to shares of Parent Common Stock
pursuant to the Amended and Restated Intercompany Agreement dated as of January
6, 1999, between Parent and the Trust (as hereinafter defined), "Units") of
Starwood Hotels & Resorts, a Maryland real estate investment trust and a
subsidiary of Parent (the "Trust"), with cash paid in lieu of a fractional Unit
and (B) $5.00 in cash; and (ii) all shares of Company Common Stock that are held
in the treasury of the Company and shares of Company Common Stock owned by
Parent or Sub or by any wholly-owned Subsidiary of Parent or of the Company
shall be canceled and no cash, capital stock of Parent or other consideration
shall be delivered in exchange therefor. All
SIDLEY & AUSTIN NEW YORK
Starwood Hotels & Resorts Worldwide, Inc.
August 23, 1999
Page 2
such shares of Company Common Stock, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist and each holder thereof or of a certificate representing any such shares
shall cease to have any rights with respect thereto, except that each holder of
such a certificate shall have the right to receive (i) certain dividends and
other distributions (paid with respect to Units), (ii) certificates representing
the Units into which such shares are converted, (iii) cash into which such
shares are converted, without interest, and (iv) any cash, without interest, in
lieu of a fractional Unit to be issued or paid in consideration therefor.
The Merger and the Agreement are more fully described in Parent's
Registration Statement on Form S-4 (the "Registration Statement") relating to
the registration of the Units and to which this opinion is an exhibit, which has
been filed by Parent with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended. The Registration Statement includes the
Information Statement/Prospectus (the "Prospectus") of Parent and the Company.
In rendering the opinions expressed below, we have relied upon the
accuracy of the facts, information and representations and the completeness of
the covenants contained in the Agreement, the Registration Statement, the
Prospectus and such other documents as we have deemed relevant and necessary
(including, without limitation, those described above). Such opinions are
conditioned, among other things, not only upon such accuracy and completeness as
of the date hereof, but also the continuing accuracy and completeness thereof as
of the Effective Time. Moreover, we have assumed the absence of any change to
any of such documents between the date thereof and the Effective Time.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons and the conformity with original documents of all copies submitted to us
for our examination. We have further assumed that: (i) the transactions related
to the Merger or contemplated by the Agreement will be consummated (A) in
accordance with the Agreement and (B) as described in the Prospectus; (ii) the
Merger will qualify as a statutory merger under the laws of the State of
Florida; and (iii) as of the date hereof, and as of the Effective Time (as if
made as of the Effective Time), the written statements made by executives of
Parent and the Company contained in the Parent Tax Certificate and Company Tax
Certificate, respectively, each dated on or about the date hereof, are and will
be accurate in all respects and neither Parent nor the Company will have
provided written notification prior to the Effective Time that a statement made
in the Parent Tax Certificate or the Company Tax Certificate, respectively, is
no longer accurate.
SIDLEY & AUSTIN NEW YORK
Starwood Hotels & Resorts Worldwide, Inc.
August 23, 1999
Page 3
In rendering the opinions expressed below, we have considered the
applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), regulations promulgated thereunder by the United States Treasury
Department (the "Regulations"), pertinent judicial authorities, rulings and
interpretations of the Internal Revenue Service and such other authorities as we
have considered relevant. It should be noted that the Code, the Regulations and
such judicial decisions, rulings, administrative interpretations and other
authorities are subject to change at any time and, in some circumstances, with
retroactive effect; and any such change could affect the opinions stated herein.
Furthermore, the opinions expressed below might not be applicable to Company
shareholders who or which, for United States federal income tax purposes, are
nonresident alien individuals, foreign corporations, foreign partnerships,
foreign trusts or foreign estates, or who acquired their Company Common Stock
pursuant to the exercise of employee stock options or otherwise as compensation.
Based upon and subject to the foregoing, it is our opinion, as counsel
for Parent, that, for federal income tax purposes:
(i) the Merger will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and Parent, Sub and the Company
will each be a party to such reorganization within the meaning of
Section 368(b) of the Code;
(ii) no gain or loss will be recognized by Parent, Sub or the
Company as a result of the Merger;
(iii) gain, but not loss, will be recognized by a common
shareholder of the Company upon the exchange of his, her or its shares
of Company Common Stock for shares of Parent Common Stock and cash in
an amount equal to the lesser of (a) the amount by which the sum of the
cash received (including any cash received in lieu of a fractional
Class B Share but not including any cash received in lieu of a
fractional share of Parent Common Stock) and the fair market value of
the Units as of the Effective Time exceeds such shareholder's adjusted
tax basis in the shares of Company Common Stock exchanged therefor and
(b) the amount of cash (including any cash received in lieu of a
fractional Class B Share but not including any cash received in lieu of
a fractional share of Parent Common Stock) and the fair market value of
the Class B Shares received;
(iv) gain or loss will be recognized by a common shareholder
of the Company in an amount equal to the difference, if any, between
the amount of any cash received in lieu of a fractional share of Parent
Common Stock and the basis allocable to the fractional share of Parent
Common Stock (as described in clause (v) below);
SIDLEY & AUSTIN NEW YORK
Starwood Hotels & Resorts Worldwide, Inc.
August 23, 1999
Page 4
(v) the aggregate tax basis of the shares of Parent Common
Stock (including the fractional share of Parent Common Stock for which
cash is received) will be the same as the aggregate tax basis of the
shares of Company Common Stock exchanged therefor, decreased by the
amount of cash (including any cash received in lieu of a fractional
Class B Share but not including any cash received in lieu of a
fractional share of Parent Common Stock) and the fair market value of
the Class B Shares received and increased by the amount of any gain
recognized by the shareholder by reason of the receipt of such cash and
the Class B Shares;
(vi) each Company shareholder will have a tax basis in the
Class B Shares received equal to the fair market value as of the
Effective Time of such Class B Shares;
(vii) the holding period of the shares of Parent Common Stock
(including the fractional share of Parent Common Stock for which cash
is received) will include the holding period of the shares of Company
Common Stock exchanged therefor, provided such shares of Company Common
Stock were held as capital assets by the shareholder at the Effective
Time.
In addition, reference is made to the statements in the Prospectus
under the caption "The Merger--Material Federal Income Tax Consequences," which
have been prepared or reviewed by us. It is our opinion that the statements made
under the caption "Material Federal Income Tax Consequences," to the extent
constituting a discussion of matters of federal income tax law or legal
conclusions with respect thereto, are true and correct in all material respects.
Except as expressly set forth above, you have not requested, and we do
not herein express, any opinion concerning the tax consequences of, or any other
matters related to, the Merger.
We assume no obligation to update or supplement this letter to reflect
any facts or circumstances which may hereafter come to our attention with
respect to the opinions expressed above, including any changes in applicable law
which may hereafter occur.
This opinion is provided to you only, and without our prior consent,
may not be relied upon, used, circulated, quoted or otherwise referred to in any
manner by any person, firm,
SIDLEY & AUSTIN NEW YORK
Starwood Hotels & Resorts Worldwide, Inc.
August 23, 1999
Page 5
governmental authority or entity whatsoever other than reliance thereon by you.
Notwithstanding the foregoing, we hereby consent to the filing of this letter as
an exhibit to the Registration Statement and to all references to our firm
included in or made part of the Registration Statement.
Very truly yours,
/s/ Sidley & Austin
