U.S. hotel owner LaSalle Hotel Properties yesterday sided with Blackstone Group LP’s $3.7 billion all-cash offer to buy the company, as it looks to thwart Pebblebrook Hotel Trust’s takeover bid.
LaSalle said Pebblebrook’s raised cash-and-stock proposal of $37.80 per share last week was not superior as 80 percent of the offer comprised stock, which the company considers a risk for its shareholders.
Pebblebrook stood pat, saying its offer remained outstanding and unveiled on Monday a 9 percent stake in LaSalle, almost double its previously disclosed holding.
That makes it the fourth largest shareholder in LaSalle, behind hedge fund HG Vora Capital Management which has supported Pebblebrook’s bid.
The company, whose portfolio includes the InterContinental Buckhead Atlanta and The Westin San Diego Gaslamp Quarter, said in a statement it was surprised that LaSalle’s board did consider its offer superior, despite being $375 million higher than Blackstone’s bid.
LaSalle, which has interests in hotels including Park Central San Francisco and Westin Michigan Avenue, the Blackstone deal represents “immediate and certain cash value” and is expected to close as early as August, the company said.
“Pebblebrook’s proposal, which includes 80 percent stock consideration, continues to fail to address the significant price risks and uncertainties for LaSalle shareholders…” LaSalle said in a statement.
Shares of both LaSalle and Pebblebrook were down about 0.5 percent in early trading.
