BETHESDA, MD—Coming fresh off a sale of its remaining 15.8 million shares in Hilton, Blackstone has entered into a deal to acquire LaSalle Hotel Properties for $33.50 per share in an all-cash transaction valued at $4.8 billion.
The transaction, which has been unanimously approved by LaSalle’s board of trustees, represents a premium of approximately 35% over LaSalle’s unaffected share price of $24.84 as of March 27, the day before the public announcement of a proposal to acquire the company in an all-stock transaction. The purchase price also represents a premium of approximately 13% to LaSalle’s consensus net asset value of $29.64 per share per FactSet as of May 18.
LaSalle, owner of 41 luxury hotels, previously received numerous offers from Pebblebrook Hotel Trust. Blackstone’s winning bid was about 35% above LaSalle’s share price on March 27, which was just before Pebblebrook proposed an all-stock deal. Pebblebrook’s post-acquisition plan was to form a portfolio of upscale hotels in order to compete with REITs like Host Hotels & Resorts Inc. and Park Hotels & Resorts Inc.
In the end, it was Blackstone’s offer that proved the “most compelling opportunity for LaSalle’s shareholders, delivering a significant premium with immediate and certain cash value,” said Stuart L. Scott, chairman of the board of LaSalle in a statement. “We are pleased to have reached this agreement with Blackstone, which we believe is in the best interests of our shareholders and represents the culmination of a thorough review of strategic alternatives.”
LaSalle contacted 20 potential buyers, including strategic parties, brands and private equity firms. As a result, 10 potential buyers came forward and the board engaged in extensive negotiations over price and terms.
Michael D. Barnello, president and CEO of LaSalle said, “After a robust and competitive process, we are pleased to enter into this transaction with Blackstone, which has a proven ability to complete large transactions on agreed terms and has extensive experience in the real estate industry.”
Completion of the transaction, which is expected to occur in the third quarter of 2018, is contingent upon customary closing conditions, including the approval of LaSalle’s shareholders. The transaction is not contingent on receipt of financing.
Pursuant to LaSalle’s previously announced dividend policy, the company expects to pay a quarterly dividend of $0.225 per common share of beneficial interest for the quarter ending June 30.
