LaSalle Hotel Properties reiterated its rejection of Pebblebrook Hotel Trust, choosing instead to move forward with a possible acquisition by the Blackstone Group.
In a regulatory filing, LaSalle disclosed that the Blackstone deal values the company at $4.8 billion. The agreement, which both sides signed last May, is an all-cash transaction that sets the stock price at $33.50. Bloomberg first reported LaSalle’s decision.
LaSalle continued to refuse Pebblebrook’s advances, saying that the Maryland-based firm’s revised offer “does not constitute, and could not reasonably be expected to lead to, a ‘superior proposal.’” Pebblebrook previously offered a purchase price of $37.80 per share. LaSalle denied an earlier proposal, which set the merger price at $35.89, before agreeing to the Blackstone bid. In explaining its verdict, LaSalle pointed to the fact that Pebblebrook’s offer includes 80 percent in stock considerations. According to LaSalle, this opens their shareholders to “significant price risks” in case Pebblebrook’s stock price drops before the closing.
Pebblebrook, meanwhile, remains undettered. The company upped its stake in LaSalle to 10 million shares, which amounts to a nine percent share of the company. In a statement, Jon Bortz, the chairman and CEO of Pebblebrook, said that the acquisition shows their “determination to complete this combination.” He also claims that his company’s proposal has “broad support” from LaSalle shareholders.
The LaSalle-Blackstone deal requires approval from a two-thirds majority of LaSalle shareholders. Pebblebrook is still not completely out of the running. It has the option to provide another amended offer.