LaSalle Hotel Properties (NYSE:LHO) (“LaSalle” or the “Company”)
today announced that its Board of Trustees (the “Board”) has
determined that the proposal from Pebblebrook Hotel Trust
(NYSE:PEB) (“Pebblebrook”) received on June 11, 2018 to acquire the
Company (the “Pebblebrook Proposal”) does not constitute, and could
not reasonably be expected to lead to, a “Superior Proposal” as
defined in LaSalle’s definitive agreement with affiliates of
Blackstone Real Estate Partners VIII (the “Blackstone Merger
Agreement”). Under the terms of the Blackstone Merger Agreement,
which the Company entered into on May 20, 2018, Blackstone will
acquire all outstanding common shares of beneficial interest of
LaSalle for $33.50 per share in an all-cash transaction valued at
$4.8 billion.
The Board’s determination follows a careful and thorough review
of the Pebblebrook Proposal in consultation with outside financial
and legal advisors. In reaching its determination, the Board
considered, among other factors:
- The key terms included in the
Pebblebrook Proposal are substantially similar to the prior
proposal submitted by Pebblebrook on May 19, 2018, which was
previously evaluated by the Board alongside the Blackstone proposal
submitted on the same date.
- Pebblebrook’s proposal, which includes
80% stock consideration, continues to fail to address the
significant price risks and uncertainties for LaSalle shareholders
that had been previously communicated to Pebblebrook. Pebblebrook
has repeatedly refused to agree to a pricing collar or similar type
of pricing protection mechanism that would protect LaSalle
shareholders against downside risks in the event of a decline in
Pebblebrook’s share price between the signing and closing of a
transaction.
- The Blackstone Merger Agreement
represents immediate and certain cash value, is in the best
interest of shareholders and is expected to close as early as
August 2018.
The LaSalle Board remains committed to completing its existing
transaction with Blackstone, which is subject to customary closing
conditions, including the approval of LaSalle’s shareholders. In
that regard, the Company today filed its preliminary proxy
statement with the Securities and Exchange Commission, which
included the LaSalle Board’s unanimous recommendation that
LaSalle’s shareholders vote “FOR” the proposal to approve the
merger and the other transactions contemplated by the Blackstone
Merger Agreement. The transaction is not contingent on receipt of
financing.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC
are acting as financial advisors to LaSalle and Goodwin Procter LLP
and DLA Piper LLP (US) are acting as legal counsel.
About LaSalle Hotel Properties
LaSalle Hotel Properties is a leading multi-operator real estate
investment trust. The Company owns 41 properties, which are
upscale, full-service hotels, totaling approximately 10,400 guest
rooms in 11 markets in seven states and the District of Columbia.
The Company focuses on owning, redeveloping and repositioning
upscale, full service hotels located in urban, resort and
convention markets. LaSalle Hotel Properties seeks to grow through
strategic relationships with premier lodging groups, including
Access Hotels & Resorts, Accor, Benchmark Hospitality, Davidson
Hotel Company, Evolution Hospitality, HEI Hotels & Resorts,
Highgate Hotels, Hilton, Hyatt Hotels Corporation, IHG, JRK Hotel
Group, Inc., Marriott International, Noble House Hotels &
Resorts, Outrigger Lodging Services, Provenance Hotels, Two Roads
Hospitality, and Viceroy Hotel Group.
Additional Information about the Proposed Merger Transaction
and Where to Find It
This communication relates to the proposed merger transaction
involving the Company and may be deemed to be solicitation material
in respect of the proposed merger transaction. In connection with
the proposed merger transaction, the Company has filed a
preliminary proxy statement (the “Proxy Statement”) with the
Securities and Exchange Commission (the "SEC"), as well as other
relevant materials in connection with the proposed merger
transaction pursuant to the terms of the Agreement and Plan of
Merger, dated as of May 20, 2018, among BRE Landmark Parent L.P.,
BRE Landmark L.P., BRE Landmark Acquisition L.P., the Company and
LaSalle Hotel Operating Partnership, L.P. This communication is not
a substitute for the Proxy Statement or for any other document that
the Company has filed or may file with the SEC or send to the
Company’s shareholders in connection with the proposed merger
transaction. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY
STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED MERGER
TRANSACTION AND RELATED MATTERS. Investors and security holders
will be able to obtain free copies of the Proxy Statement and other
documents filed by the Company with the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of the
documents filed by the Company with the SEC will also be available
free of charge on the Company’s website at www.lasallehotels.com,
or by contacting the Company’s Investor Relations Department at
(301) 941- 1500. The Company and its trustees and certain of its
executive officers may be considered participants in the
solicitation of proxies from the Company’s shareholders with
respect to the proposed merger transaction under the rules of the
SEC. Information about the trustees and executive officers of the
Company is set forth in its Annual Report on Form 10-K for the year
ended December 31, 2017, which was filed with the SEC on February
20, 2018, its proxy statement for its 2018 annual meeting of
shareholders, which was filed with the SEC on March 22, 2018 and in
subsequent documents filed with the SEC. Additional information
regarding persons who may be deemed participants in the proxy
solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, will also be included
in the Proxy Statement and other relevant materials to be filed
with the SEC when they become available. You may obtain free copies
of this document as described above.
Cautionary Statement Regarding Forward-Looking
Statements
This press release, together with other statements and
information publicly disseminated by the Company, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends
such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with these safe harbor
provisions. The forward-looking statements contained in this press
release, including statements regarding the proposed merger
transaction and the timing of such transaction, are subject to
various risks and uncertainties. Although the Company believes the
expectations reflected in any forward-looking statements contained
herein are based on reasonable assumptions, there can be no
assurance that our expectations will be achieved. Forward-looking
statements, which are based on certain assumptions and describe
future plans, strategies and expectations of the Company, are
generally identifiable by use of the words “believe,” “expect,”
“intend,” “anticipate,” “estimate,” “project,” or other similar
expressions. Such statements involve known and unknown risks,
uncertainties, and other factors that may cause the actual results
of the Company to differ materially from future results,
performance or achievements projected or contemplated in the
forward-looking statements. Some of the factors that may affect
outcomes and results include, but are not limited to: (i) risks
associated with the Company’s ability to obtain the shareholder
approval required to consummate the merger and the timing of the
closing of the merger, including the risks that a condition to
closing would not be satisfied within the expected timeframe or at
all or that the closing of the merger will not occur, (ii) the
outcome of any legal proceedings that may be instituted against the
parties and others related to the merger agreement, (iii)
unanticipated difficulties or expenditures relating to the
transaction, the response of business partners and competitors to
the announcement of the transaction, and/or potential difficulties
in employee retention as a result of the announcement and pendency
of the transaction, (iv) changes affecting the real estate industry
and changes in financial markets, interest rates and foreign
currency exchange rates, (v) increased or unanticipated competition
for the Company’s properties, (vi) risks associated with the hotel
industry, including competition for guests and meetings from other
hotels and alternative lodging companies, increases in wages,
energy costs and other operating costs, potential unionization or
union disruption, actual or threatened terrorist attacks, any type
of flu or disease-related pandemic and downturns in general and
local economic conditions, (vii) the availability and terms of
financing and capital and the general volatility of securities
markets, (viii) the Company’s dependence on third-party managers of
its hotels, including its inability to implement strategic business
decisions directly, (ix) risks associated with the real estate
industry, including environmental contamination and costs of
complying with the Americans with Disabilities Act of 1990, as
amended, and similar laws, (x) the possible failure of the Company
to maintain its qualification as a REIT and the risk of changes in
laws affecting REITs, (xi) the possibility of uninsured losses,
(xii) risks associated with redevelopment and repositioning
projects, including delays and cost overruns, (xiii) the risk of a
material failure, inadequacy, interruption or security failure of
the Company’s or the hotel managers’ information technology
networks and systems, (xiv) uncertainties regarding future actions
that may be taken by Pebblebrook in furtherance of its unsolicited
proposal, and (xv) those additional risks and factors discussed in
reports filed with the SEC by the Company from time to time,
including those discussed under the heading “Risk Factors” in its
most recently filed reports on Form 10-K and 10-Q. The Company
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Investors should not place undue reliance upon
forward-looking statements.
For additional information or to receive press releases via
e-mail, please visit our website at
http://www.lasallehotels.com/
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version on businesswire.com: https://www.businesswire.com/news/home/20180618005545/en/
LaSalle Hotel PropertiesKenneth G. Fuller or Max D. Leinweber,
301-941-1500orInnisfree M&A IncorporatedScott Winter / Jonathan
Salzberger, 212-750-5833orMedia:Joele Frank, Wilkinson
Brimmer KatcherMeaghan Repko / Andrew Siegel, 212-355-4449
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