Weisman Group LLC raised its offer to acquire AshfordHospitality Prime Inc. to $1.54 billion and said it hopes to continuenegotiating with the REIT about the terms of the deal.
In a July 21 letter, Weisman said its new offer amounts to roughly$23.65 per Ashford Prime share, or $20.58 per share after allocating $70 millionto the REIT's termination fee with external manager Ashford Inc. The investor, which controls roughly 5.3% ofAshford Prime's outstanding shares, previously was offering $1.48 billion.
The two sides have differedover the size of the termination fee, which Ashford Prime likely would have to payto Ashford Inc. if the manager is removed. Ashford Prime — which shares severalkey executives with Ashford Inc., including Chairman and CEO Monty Bennett — hasnot specified the size of the expected fee but maintains it will be significantlyhigher than Weisman's estimate.
In the letter, Weisman Group manager Lyle Weisman acknowledgedthat the fee is "subject to negotiation." Weisman Group will participatein discussions that include Ashford Inc., Weisman said.
Weisman's letter enumerated a series of unresolved matters thatcould still stand in the way of a deal, though the firm said it is open, even beforethe differences are resolved, to signing a definitive acquisition agreement thatwould include a "substantial" deposit, a go-shop period and a breakupfee.
The letter struck a conciliatory note with regard to details.
As company shareholders, "we obviously want to amicablyresolve and negotiate the advisory agreement termination fee," Weisman wrote,"but as buyers of the company, the magnitude of the termination fee will notmaterially impact our decision to move forward on the transaction."
He added: "In other words, we are accommodating and flexibleto any and all paths that will help ensure that our offer be accepted by the companyand presented to all shareholders of AHP for ratification, as long as those pathsdon't unduly restrict our ability to participate in a transaction."