Pebblebrook Makes Third And 'Final' Offer To Buy LaSalle
The bidding war over Bethesda-based LaSalle Hotel Properties is continuing, with Pebblebrook Hotel Trust once again upping its offer following reports that other big-pocketed investors have gotten involved.
Pebblebrook, also based in Bethesda, Tuesday released a letter it sent to LaSalle offering a "final merger proposal" of $32.49/share, up from its previous offer of $31.75/share.
The company first offered $30/share in March, only to have LaSalle reject its offer in strong terms. LaSalle then returned with the $31.75/share offer on April 13. Reports then surfaced that other investors such as Blackstone Group, Starwood Capital Group, Brookfield Property Partners and REITs such as Park Hotels & Resorts and Sunstone Investors were doing due diligence on LaSalle. Pebblebrook addressed the competing suitors in its latest letter.
"We have not received a response from you regarding our revised offer detailed in our April 13, 2018, letter," Pebblebrook wrote to LaSalle. "Nevertheless, we understand that you may be evaluating other offers which may be at prices lower than ours. Before entering into an agreement to accept any such offer [accompanied] by a break-up fee, potentially depriving shareholders of a higher-value transaction, we urge you to consider our proposal and engage in discussions with us."
Pebblebrook's letter highlights that the new offer represents a 33.2% premium above LaSalle's closing share price on March 27, when it traded for less than $25/share. LaSalle's stock has since rebounded, primarily because of the acquisition offers, and it now sits above $30/share.
LaSalle's portfolio consists of 41 properties totaling 10,400 rooms in 11 markets. Analysts recently told Bisnow the $31.75/share offer would make strategic and financial sense for LaSalle to take, though they could see the REIT continuing to push up the price. A Pebblebrook-LaSalle merger would create the nation's third-largest lodging REIT with a combined asset value of $8B.
