RICHMOND—Life is good for Apple Hospitality REIT and its shareholders these days, according to the company's latest earnings release. It dubbed 2014 as a "landmark year'" and highlighted events in store in the near term. These events include the pending purchase of five hotels for $146 million and its plans to go public on the New York Stock Exchange on May 18.
In March chairman Glade Knight informed shareholders that it was seeking a liquidity exit and it would probably happen. "With anticipated continued improvement in the company's operating results and industry projections of sustained growth in the hotel sector, we believe a listing of the company's shares for trading on a national securities exchange provides the most favorable option for shareholder liquidity at this time and the company has begun taking steps in that direction," Knight wrote.
In April the company filed plans with the Securities and Exchange Commission to go public. Trading is scheduled to begin on the NYSE under the ticker symbol "APLE."
Apple Hospitality will also complete a 50% reverse share split prior to the listing via a modified Dutch Auction tender offer. It plans to purchase up to $200 million of Apple Hospitality's common shares within an anticipated range of $19.00 to $21.00 ($9.50 to $10.50 pre-reverse share split) per share.
In addition, the Board of Directors has authorized a share buyback program of up to $500 million following the completion of the tender offer.
The company also has entered into contracts to buy five hotels for a total purchase price of $146 million, it said.
"2014 was a landmark year for Apple Hospitality and 2015 is off to a solid start," Justin Knight, president and CEO said in the earnings release.
"We look forward to providing our existing shareholders with a flexible option of liquidity with the planned listing of the company's common shares on the New York Stock Exchange later this month," he continues. "We believe … the company is well positioned to enhance shareholder value as hotel industry fundamentals continue to strengthen."
Apple Hospitality REIT, formerly Apple REIT nine, includes the mergers of Apple REIT Seven, and Apple REIT Eight.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
