In late March Pebblebrook Hotel Trust (PEB
39.93, -0.51, -1.3%) released two letters to LaSalle Hotel (LHO
34.95, -0.24, -0.7%), proposing a share-for-share merger. Since then, there
have been a few back-and-forth bids from private-equity company Blackstone (BX
33.03, +0.28, +0.9%).
In the latest development, this morning Pebblebrook released a revised merger proposal for a strategic combination with LaSalle.
The original offer made on March 28 represented an implied merger value of $30.00/share, and before the day was over LaSalle had rejected the offer. On April 16 Pebblebrook upped its offer once more, to $31.75/share, but before investors knew it, the offer was upped once again on April 23 to an implied value of $32.49/share.
On May 21, Blackstone announced its entry into the bidding for LaSalle. The firm offered $33.50 per LaSalle share in cash, and not one hour later, the offer was accepted by LaSalle management.
Not to be outdone, today’s offer by Pebblebrook once again ups the implied price to $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 VWAP as of June 8, 2018.
Pebblebrook’s new offer provides LaSalle’s common shareholders with the option for each share to elect to receive $37.80/share in cash instead of Pebblebrook shares, subject to a cap of 20% of LaSalle shares receiving cash and customary pro ration if the number of LaSalle holders electing to receive cash instead of stock is oversubscribed. The per share cash amount is fixed at $37.80 and was calculated by multiplying the fixed exchange ratio of 0.92 and Pebblebrook’s 5-day VWAP of $41.09 as of June 8, 2018.
In accordance with the terms of the Blackstone Merger Agreement, and in consultation with its financial and legal advisers, the LaSalle Board of Trustees will carefully review Pebblebrook’s proposal to determine the course of action that it believes is in the best interest of the company’s shareholders.
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