LaSalle Hotel Properties’ board of trustees has turned down Pebblebrook Hotel Trust’s most recent proposal to acquire the REIT. Under terms of the Blackstone merger agreement, which LaSalle entered into on May 20, the New York-headquartered company will buy LaSalle for $33.50 per share in an all-cash transaction that values the owner at $4.8 billion. The sale is expected to close as early as August.
According to LaSalle, its board of trustees determined that Pebblebrook’s latest proposal, which includes 80% stock consideration, fails to address the price risks and uncertainties for the Bethesda, Maryland-based company’s shareholders. Pebblebrook, one of LaSalle’s local competitors, has also “repeatedly refused to agree to a pricing collar or similar type of pricing protection mechanism that would protect LaSalle shareholders against downside risks in the event of a decline in Pebblebrook’s share price between the signing and closing of a transaction,” according to a statement from LaSalle.
Last week, Pebblebrook described its latest bid, $37.80 per share, as a 13% premium over Blackstone’s offer.
LaSalle owns 41 upscale and full-service hotels totaling about 10,400 keys throughout seven states and the Washington, D.C. market. Citigroup Global Markets Inc. and Goldman Sachs & Co. are acting as LaSalle’s financial advisors for the sale, while Goodwin Procter LLP and DLA Piper LLP are acting as the company’s legal counsel.