After multiple rounds of offers from Pebblebrook Hotel Trust, LaSalle Hotel Properties has agreed to be acquired — only by Blackstone Real Estate Partners VIII. The global asset manager will acquire all outstanding common shares of LaSalle 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 share price of $24.84 as of March 27, 2018, the day before Pebblebrook’s 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 as of May 18, 2018.
As part of the Board’s review, LaSalle contacted 20 potential buyers, including strategic parties, brands and private equity firms, according to Chairman of the Board Stuart L. Scott. Ten potential buyers executed confidentiality agreements and received non-public information, and the board engaged in extensive negotiations over price and terms, he said.
The acquisition is expected to close in the third quarter of 2018, contingent upon customary closing conditions, including the approval of LaSalle’s shareholders.
In a statement, Pebblebrook expressed its disappointment. “Our offer is substantially superior to the merger agreement that LaSalle has reached with Blackstone,” said CEO Jon Bortz. “We continue to believe that our offer maximizes immediate and long-term value for LaSalle’s shareholders.”
The deal follows Blackstone’s exit from its 5.8% position in Hilton Worldwide Holdings last week. The sale of 15.8 million shares is expected to generate $1.32 billion. Hilton announced it would buy back about 1.3 million shares.
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