Kemmons Wilson, Ascendant Capital Acquiring Lodging REIT

A joint venture is set to acquire Sotherly Hotels at one of the highest premiums in recent memory, according to the real estate investment trust.

Affiliates of Kemmons Wilson Hospitality Partners and Ascendant Capital Partners — a joint venture dubbed KW Kingfisher — agreed to buy all of the outstanding shares in the lodging firm, Sotherly announced. The joint venture will pay $2.25 per share in cash, valuing the company at about $46.1 million, according to Bisnow.

The proposal represents a 153 percent premium on Friday’s closing price and a 127 percent premium to the volume-weighted average share price over the last 30 days. It’s the highest premium paid for a public REIT in the last five years, according to Sotherly.

“This transaction is a testament to the high-quality portfolio that Sotherly has built over the past 20+ years as a publicly traded company and we are confident this will pave a path towards future success for our hotels and the associates and guests that enjoy them every day,” Sotherly’s CEO David Folsom said in a statement.

Apollo and Ascendant provided debt financing commitments for the transaction, which is expected to close early next year.

Sotherly’s board of directors unanimously approved the merger. Shareholders will get a say, but Sotherly chair Andrew Sims — one of the largest shareholders — has already committed his shares in favor of the transaction.

Sotherly was formed two decades ago to own, acquire and reposition upscale hotels in the mid-Atlantic and Southern regions of the country. The company owns 10 hotels, accounting for 2,786 rooms, in addition to interests in two condominium hotels.

Kemmons Wilson is an investment management firm based in Memphis focused on hospitality, an obvious interest since the Kemmons Wilson family founded the Holiday Inn brand. Kemmons Wilson was an investor in Texas cowboy-boot maker Tecovas several years ago.

Russell Gimelstob’s Ascendant Capital Partners previously provided $60 million in preferred equity for the ultra-luxury development at 125 Perry Street in Manhattan’s West Village.