X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ORLANDO-It was going to be the biggest event in the 15-year-old history of locally based CNL Hospitality Properties Inc. but the planned $700-million initial public offering on Wall Street is off the table and back on the shelf after company officials cancelled the offering Aug. 3.

“We didn’t get the price we wanted,” a CNL staffer, intimate with the offering, tells GlobeSt.com. “We are evaluating our timing” for the resumption of the offering at a near-future date. The staffer adds, “We are in the wonderful position of not needing the money right now so we felt it was in the best interests of the shareholders” to postpone the IPO “until we get the price we want.”

The company–the second largest hotel REIT in the US after Host Marriott–had planned the IPO since July 19 but had set no firm date with the Securities and Exchange Commission. Wall Street sources maintain CNL’s $20-per-share price was too high and its planned 35 million shares offering too low to make the deal work.

They speculate that a share price in the $11 to $12 range might be more realistic. New York sources also criticized the estimated $25-million price being paid to CNL’s outside advisor, CNL Hospitality Corp., to orchestrate the IPO. Sources say the initial price to the advisor was $300 million.

But local banker sources, not associated with the IPO, tell GlobeSt.com CNL felt market conditions and not subscriptions to the offering, caused the company to temporarily shelve the IPO. That view contrasts with other earlier industry comments that the hotel market is turning around and that CNL’s IPO proposal was on target to catch the market’s upswing, local hospitality sources tell GlobeSt.com.

CNL Hospitality CEO Thomas J. Hutchison was reported to be meeting with his staff and financial advisors all day and couldn’t be reached for comment on what the company’s next move might be. CNL sources tell GlobeSt.com the company is in “a quiet period” and can’t formally comment on the IPO, according to Securities and Exchange Commission rules. However, sources working with Hutchison cite a new terrorism threat, issued by the Homeland Security Department, against Wall Street financial houses was a factor in CNL’s decision to postpone the IPO. The company’s $6-billion portfolio comprises 32,500 rooms in 136 hotels in 37 states and Canada boasting 19 nationally recognized brands.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.