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UPDATE: Pebblebrook revises LaSalle takeover bid to compete with Blackstone

Pebblebrook Hotel Trust submitted a revised offer to buy fellow Bethesda, Md.-based peer LaSalle Hotel Properties for an implied price of $37.80 per common share, representing a 13% premium over the $33.50-per-share offer LaSalle agreed to under a deal with an affiliate of Blackstone Group LP.

Pebblebrook's new offer, as approved unanimously by its board, is based on a fixed exchange ratio of 0.92 Pebblebrook common share for each LaSalle common share and Pebblebrook's five-day volume-weighted average price as of June 8. The hotel real estate investment trust added that the price also takes into account the $112 million termination fee payable by LaSalle if it terminates its deal with Blackstone.

The break-up fee under Pebblebrook's proposal is also $112.0 million.

In a separate release, LaSalle confirmed that it received the updated proposal, and said its board is carefully reviewing the Pebblebrook proposal to determine if it constitutes, or could lead to, a superior proposal to the Blackstone agreement. LaSalle did not provide a firm timeline for its response.

LaSalle agreed to be acquired by Blackstone Real Estate Partners VIII in May in an all-cash deal valued at $4.8 billion, following its rejections of previous Pebblebrook takeover offers of $30.00, $31.75 and $32.49 per share. The company's board has unanimously approved the Blackstone deal, which is set to close in the third quarter, subject to certain conditions.

Under Pebblebrook's offer, up to 20% of outstanding LaSalle shares are eligible to receive the consideration in cash. Those who elect to receive cash will be subject to pro rata cutbacks if more than 20% of its shareholders opt for cash.

In a June 11 letter addressed to LaSalle's board of trustees, Pebblebrook Chairman, President and CEO Jon Bortz said Pebblebrook is willing to enter into a merger deal "essentially identical" to the agreement with Blackstone.

Raymond James and BofA Merrill Lynch are acting as Pebblebrook's financial advisers in the proposed deal, and Hunton Andrews Kurth LLP is acting as its legal counsel, while Okapi Partners LLC is serving as its information agent.

Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are serving as financial advisers to LaSalle and Goodwin Procter LLP and DLA Piper LLP (US) are acting as legal counsel.