After Hilton success, Blackstone makes $4.8B bid to buy LaSalle Hotel Properties

Private equity giant outmaneuvered Pebblebrook Hotel Trust

TRD New York /
May.May 21, 2018 11:10 AM
Park Central New York and Jonathan Gray

Park Central New York and Jonathan Gray

Blackstone Group outmaneuvered Pebblebrook Hotel Trust to buy luxury hotel owner LaSalle Hotel Properties with an all-cash bid of $4.8 billion, including debt.

The agreement comes just three days after Blackstone sold its remaining shares in Hilton Hotels, making its investment in the company most profitable leveraged buyout in history at $14 billion.

Blackstone agreed to buy LaSalle at $33.50 per share, or a premium of almost 35 percent above the company’s share price on March 27, Bloomberg reported.

That was the day that Pebblebrook first announced a proposed all-stock deal to buy LaSalle. The company made three public bids, with the last one disclosed on April 24 valuing LaSalle’s shares at $35.44.

Even though Pebblebrook’s proposal is higher than Blackstone’s, LaSalle’s board preferred the certainty of the latter, people familiar with the process told Bloomberg.

“After careful consideration of multiple proposals received, the board determined that this transaction represents the most compelling opportunity for LaSalle’s shareholders, delivering a significant premium with immediate and certain cash value,” LaSalle chairman Stuart Scott said of the Blackstone agreement.

LaSalle owns four hotels in Manhattan, according to its website: Gild Hall, Park Central New York, the Roger and WestHouse.

Blackstone’s offer requires two-thirds support from LaSalle’s shareholders to go forward. The deal is scheduled to be completed in the third quarter.

If LaSalle chose to terminate the deal, it would pay a breakup fee of $112 million. Should Blackstone walk away, it would pay a reverse breakup fee of $336 million, sources said. [Bloomberg]Rich Bockmann


Related Articles

arrow_forward_ios
Andrew Florance, CEO of CoStar (Photo by Jeffrey MacMillan for the Washington Post)

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts
An institutional investor’s sale of a 7 percent stake in an exchange-traded real estate fund reveals deep concerns about the sector. (Credit: iStock)

Mystery investor dumps big stake in real estate fund

Mystery investor dumps big stake in real estate fund
Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off
CEO Andrew Florance (Credit: CoStar via YouTube)

CoStar buying Ten-X for $190M

CoStar buying Ten-X for $190M
Small landlords, such as Jan Lee, a New York landlord who owns two buildings, say Wall Street players will take their place unless rent relief comes soon. (Credit: Twitter; background via BRYAN R. SMITH/AFP via Getty Images)

Small landlords call for rent relief package, fearing Wall Street takeover

Small landlords call for rent relief package, fearing Wall Street takeover
Cohen Brothers Realty president and CEO Charles Cohen and Cushman & Wakefield Chairman of Global Brokerage Bruce Mosler

Hear from billionaire Charles Cohen on today’s TRD Talk

Hear from billionaire Charles Cohen on today’s TRD Talk
Northwind's Ran Eliasaf

Northwind Group launches $220M debt fund focused on NYC

Northwind Group launches $220M debt fund focused on NYC
(Credit: iStock, Pixabay)

NY bill would let businesses take temperatures, refuse entry

NY bill would let businesses take temperatures, refuse entry
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...