Pebblebrook Submits Revised Offer For LaSalle Hotel Properties
Its latest price is an implied $37.80 per LaSalle common share. LaSalle agreed to be acquired by Blackstone for $33.50 per share.
BETHESDA, MD–Pebblebrook Hotel Trust released a letter this morning that it has sent to LaSalle Hotel Properties’ Board of Trustees in which it offers to acquire the REIT at a higher price than its previous offers — and a 13% premium over Blackstone’s offer.
Last month, LaSalle Hotel Properties agreed to be acquired by Blackstone for $33.50 per share in an all-cash transaction valued at $4.8 billion. LaSalle agreed to this deal after spurning multiple offers by Pebblebrook.
Pebblebrook’s new offer represents an implied price of $37.80 per LaSalle common share based on a fixed exchange ratio of 0.92 Pebblebrook common share for each LaSalle common share and Pebblebrook’s 5-day volume weighted average price as of June 8, 2018. The offer also takes into account the $112 million cost of the termination fee LaSalle agreed to pay to Blackstone.
Pebblebrook president and CEO Jon E. Bortz said that the company is not aware of any listed equity REIT M&A transactions in the last ten or so years, in which a target has agreed to a cash offer at a discount of greater than 1% compared to a competing share or share/cash offer. According to Pebblebrook, the only listed equity REIT M&A transaction since 2006 in which a lower cash offer was accepted compared to a competing stock and cash offer was Blackstone’s acquisition of Equity Office Properties in 2007. Blackstone’s offer represented a less than 1% discount to the competing stock/cash offer.
Bortz also said that Pebblebrook’s stock consideration is more attractive to LaSalle’s shareholders from a tax perspective. Shareholders that want cash are also accommodated.
Pebblebrook’s offer provides LaSalle’s shareholders with the option for each share to elect to receive $37.80 per share in cash instead of Pebblebrook shares, subject to a cap of 20% of LaSalle shares if the number of LaSalle holders electing to receive cash instead of stock is oversubscribed.
“Our offer is without a doubt a superior proposal to the sale agreement LaSalle executed with Blackstone,” Bortz says in a prepared statement.