The Blackstone Group is out, and Pebblebrook Hotel Trust is the winning suitor for real estate property trust LaSalle Hotel Properties.
The two have entered into a definitive merger agreement valued at approximately $5.2 billion under which Pebblebrook will acquire 100% of LaSalle’s outstanding common shares. LaSalle has terminated itswith affiliates of Blackstone after the company waived the four-day period in which it could have proposed amendments to the original terms of its May deal.
Under the terms of the Pebblebrook-LaSalle agreement, for each LaSalle common share owned, each LaSalle shareholder will receive either a fixed amount of $37.80 in cash or a fixed exchange ratio of 0.92 Pebblebrook common share. A maximum of 30% of the outstanding LaSalle common shares may be exchanged for cash, subject to pro ration. The LaSalle common shares Pebblebrook already owns will be canceled and excluded from the cash election. The deal has been approved through a unanimous vote by the board of trustees of Pebblebrook and LaSalle.
The combined company will comprise a portfolio of 66 upper-upscale and luxury hotels located in key urban U.S. markets. That figure comes after Pebblebrook sells certain LaSalle properties in connection with the deal closing. LaSalle will sell three of its hotels, or about 1,600 guestrooms. However, the merger deal is not contingent on the disposition of the hotels.
Photo of The Marker San Francisco guestroom: Courtesy of LaSalle