LaSalle Hotel Properties (“LaSalle” or the “Company”) today announced that its Board of Trustees (the “Board”) has determined that the proposal from Pebblebrook Hotel Trust (NYSE:PEB) (“Pebblebrook”) received on June 11, 2018 to acquire the Company (the “Pebblebrook Proposal”) does not constitute, and could not reasonably be expected to lead to, a “Superior Proposal” as defined in LaSalle’s definitive agreement with affiliates of Blackstone Real Estate Partners VIII (the “Blackstone Merger Agreement”). Under the terms of the Blackstone Merger Agreement, which the Company entered into on May 20, 2018, Blackstone will acquire all outstanding common shares of beneficial interest of LaSalle for $33.50 per share in an all-cash transaction valued at $4.8 billion.
The Board’s determination follows a careful and thorough review of the Pebblebrook Proposal in consultation with outside financial and legal advisors. In reaching its determination, the Board considered, among other factors:
- The key terms included in the Pebblebrook Proposal are substantially similar to the prior proposal submitted by Pebblebrook on May 19, 2018, which was previously evaluated by the Board alongside the Blackstone proposal submitted on the same date.
- Pebblebrook’s proposal, which includes 80% stock consideration, continues to fail to address the significant price risks and uncertainties for LaSalle shareholders that had been previously communicated to Pebblebrook. Pebblebrook has 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.
- The Blackstone Merger Agreement represents immediate and certain cash value, is in the best interest of shareholders and is expected to close as early as August 2018.
The LaSalle Board remains committed to completing its existing transaction with Blackstone, which is subject to customary closing conditions, including the approval of LaSalle’s shareholders. In that regard, the Company today filed its preliminary proxy statement with the Securities and Exchange Commission, which included the LaSalle Board’s unanimous recommendation that LaSalle’s shareholders vote “FOR” the proposal to approve the merger and the other transactions contemplated by the Blackstone Merger Agreement. The transaction is not contingent on receipt of financing.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are acting as financial advisors to LaSalle and Goodwin Procter LLP and DLA Piper LLP (US) are acting as legal counsel.
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