Under the agreement, Apollo will assume Innkeepers indebtedness. Innkeepers will pay its first quarter common share dividend April 24 and has agreed to suspend any further common share dividends. "Innkeepers provides stable, long-term cash flow making it a valuable investment for Apollo Investment Corp.'s shareholders," says Apollo Investment Corp. president and COO James Zelter.

Innkeepers owns extended-stay hotel properties throughout the US including Residence Inns, Summerfield Suites and Hampton Inns. It owns 74 hotels with a total of 9,808 rooms or suites and one 355-room hotel in which it owns a 49% equity interest. The transaction, which is subject to Innkeepers common shareholder approval and other customary closing conditions, is expected to be completed during the second quarter. The transaction is not contingent upon Apollo Investment Corp. or any of its affiliates obtaining financing. Following completion of the transaction, the properties will be managed by an affiliate of Jeffrey Fisher, chairman of the board, CEO and president of Innkeepers. Innkeepers will maintain its REIT tax status.

"We have an obligation to consider offers," Innkeepers CFO Dennis Craven tells GlobeSt.com. "We believe this is a far price for our shareholders in an all-cash transaction."

Lehman Brothers and UBS Investment Bank are serving as financial advisors to Innkeepers and Wachtell, Lipton, Rosen & Katz is serving as its legal counsel. JF Capital Advisors is serving as financial advisor to Apollo Investment Corp. and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal counsel.