LaSalle Hotel Properties has reversed course, jettisoning the Blackstone Group’s $4.8 billion offer to acquire the company and instead accepting Pebblebrook Hotel Trust’s bid. The real estate investment trust announced on Wednesday that Pebblebrook’s bid was a “superior proposal” to the one it had accepted from Blackstone. The REIT has notified Blackstone of its plan to cancel the deal, under which the company would’ve acquired LaSalle for $33.50 per share. As part of its agreement with Blackstone, LaSalle will now be on the hook for a $112 million breakup fee, but Pebblebrook previously indicated that it would cover the severance. Representatives from Blackstone couldn’t immediately be reached for comment. Last month, LaSalle officials said that the company was considering Pebblebrook’s latest offer. The Maryland-based company, which already owns 9.8 percent of LaSalle, offered investors 0.92 common share and the option of $37.80 per share in cash for up to 30 percent of the deal. According to Bloomberg, that offer pencils out to $35.09 a share. For several months, Pebblebrook has been trying to intervene in LaSalle’s deal with Blackstone. LaSalle denied an earlier proposal from Pebblebrook, before agreeing to the Blackstone bid in June. Blackstone could still offer up changes to its offer before the deal is officially canceled.<doc-sep>BETHESDA, Md.--(BUSINESS WIRE)--Pebblebrook Hotel Trust (NYSE: PEB) (“Pebblebrook”) and LaSalle Hotel Properties (NYSE: LHO) (“LaSalle”) announced today that their pending merger transaction is on schedule for a planned closing date of November 30, 2018. Pebblebrook and LaSalle will each hold a special meeting of its shareholders on November 27, 2018 to approve Pebblebrook’s proposed acquisition of LaSalle. Pebblebrook and LaSalle shareholders of record as of the close of business on October 23, 2018 will be entitled to vote at the applicable special meeting of shareholders. Additionally, the companies announced that the joint proxy statement/prospectus, which was filed as part of a registration statement on Form S-4 in connection with the proposed merger, is expected to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) on October 29, 2018. As previously announced on September 6, 2018, Pebblebrook and LaSalle entered into a definitive merger agreement pursuant to which Pebblebrook will acquire 100% of LaSalle’s outstanding common shares. Under the terms of the merger agreement, for each LaSalle common share owned, each LaSalle shareholder may elect to receive either a fixed amount of $37.80 in cash or a fixed exchange ratio of 0.92 Pebblebrook common share. A maximum of 30% of the outstanding LaSalle common shares may elect to receive cash (and elections of cash will be subject to pro rata cutbacks if holders of more than 30% of the outstanding LaSalle common shares elect to receive cash). The transaction is subject to customary closing conditions, including approval by LaSalle shareholders and Pebblebrook shareholders. About Pebblebrook Hotel Trust Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 28 hotels, with a total of 6,973 guest rooms. The Company owns hotels located in 9 states and the District of Columbia, including: Los Angeles, California (Beverly Hills, Santa Monica and West Hollywood); San Diego, California; San Francisco, California; Washington, DC; Coral Gables, Florida; Naples, Florida; Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota; Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee; Columbia River Gorge, Washington; and Seattle, Washington. For more information, please visit us at www.pebblebrookhotels.com and follow us on Twitter at @PebblebrookPEB. About LaSalle Hotel Properties LaSalle Hotel Properties is a leading multi-operator real estate investment trust. LaSalle owns 41 properties, which are upscale, full-service hotels, totaling approximately 10,400 guest rooms in 11 markets in seven states and the District of Columbia. LaSalle focuses on owning, redeveloping and repositioning upscale, full service hotels located in urban, resort and convention markets. LaSalle Hotel Properties seeks to grow through strategic relationships with premier lodging groups, including Access Hotels & Resorts, Accor, Benchmark Hospitality, Davidson Hotel Company, Evolution Hospitality, HEI Hotels & Resorts, Highgate Hotels, Hilton, Hyatt Hotels Corporation, IHG, JRK Hotel Group, Inc., Marriott International, Noble House Hotels & Resorts, Outrigger Lodging Services, Provenance Hotels, Two Roads Hospitality, and Viceroy Hotel Group. Additional Information about the Proposed Merger Transaction and Where to Find It This communication relates to the proposed merger transaction pursuant to the terms of the Agreement and Plan of Merger, dated as of September 6, 2018, as amended on September 18, 2018, by and among Pebblebrook Hotel Trust, Pebblebrook Hotel, L.P., Ping Merger Sub, LLC, Ping Merger OP, LP, LaSalle Hotel Properties and LaSalle Hotel Operating Partnership, L.P. In connection with the proposed merger transaction, on September 18, 2018, Pebblebrook filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 (which registration statement has not yet been declared effective) that included a preliminary joint proxy statement/prospectus of Pebblebrook and LaSalle that also constitutes a prospectus of Pebblebrook (which joint proxy statement/prospectus has not yet been declared effective). Pebblebrook and LaSalle also plan to file other relevant documents with the SEC regarding the proposed merger transaction. INVESTORS ARE URGED TO READ THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER TRANSACTION. You may obtain a free copy of the preliminary joint proxy statement/prospectus and other relevant documents (if and when they become available) filed by Pebblebrook or LaSalle with the SEC at the SEC’s website at www.sec.gov. Copies of the documents filed by Pebblebrook with the SEC will be available free of charge on Pebblebrook’s website at www.pebblebrookhotels.com or by contacting Pebblebrook’s Investor Relations at (240) 507-1330. Copies of the documents filed by LaSalle with the SEC will be available free of charge on LaSalle’s website at www.lasallehotels.com or by contacting LaSalle’s Investor Relations at (301) 941-1500. Certain Information Regarding Participants Pebblebrook and LaSalle and their respective trustees, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger transaction. You can find information about Pebblebrook’s executive officers and trustees in Pebblebrook’s definitive proxy statement filed with the SEC on April 27, 2018 in connection with Pebblebrook’s 2018 annual meeting of shareholders. You can find information about LaSalle’s executive officers and directors in LaSalle’s definitive proxy statement filed with the SEC on July 30, 2018 in connection with its 2018 special meeting of shareholders. Additional information regarding the interests of such potential participants will be included in the joint proxy statement/prospectus and other relevant documents filed with the SEC if and when they become available. You may obtain free copies of these documents from Pebblebrook or LaSalle using the sources indicated above. No Offer or Solicitation This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”). Cautionary Statement Regarding Forward Looking Statements Certain statements in this communication that are not in the present or past tense or that discuss the expectations of Pebblebrook and/or LaSalle are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements, which are based on current expectations, estimates and projections about the industry and markets in which Pebblebrook and LaSalle operate and beliefs of and assumptions made by Pebblebrook management and LaSalle management, involve uncertainties that could significantly affect the financial results of Pebblebrook or LaSalle or the combined company. Pebblebrook and LaSalle intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” and variations of such words and similar expressions are intended to identify such forward looking statements, which generally are not historical in nature. Such forward-looking statements may include, but are not limited to, statements about the anticipated benefits of the proposed merger transaction, including future financial and operating results, the attractiveness of the value to be received by LaSalle shareholders, the attractiveness of the value to be received by Pebblebrook and the combined company’s plans, objectives, expectations and intentions and descriptions relating to these expectations. All statements that address operating performance, events or developments that Pebblebrook and LaSalle expect or anticipate will occur in the future —including statements relating to expected synergies, improved liquidity and balance sheet strength —are forward looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although Pebblebrook and LaSalle believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, Pebblebrook and LaSalle can give no assurance that their expectations will be attained and therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) the outcome of any legal proceedings that may be instituted against the companies and others related to the proposed merger transaction, (ii) unanticipated difficulties or expenditures relating to the proposed merger transaction, the response of business partners and competitors to the announcement of the proposed merger transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed merger transaction, (iii) changes affecting the real estate industry and changes in financial markets, interest rates and foreign currency exchange rates, (iv) increased or unanticipated competition for the companies’ properties, (v) risks associated with the hotel industry, including competition for guests and meetings from other hotels and alternative lodging companies, increases in wages, energy costs and other operating costs, potential unionization or union disruption, actual or threatened terrorist attacks, any type of flu or disease-related pandemic and downturns in general and local economic conditions, (vi) the availability and terms of financing and capital and the general volatility of securities markets, (vii) the companies’ respective dependence on third-party managers of their respective hotels, including their inability to implement strategic business decisions directly, (viii) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act of 1990, as amended, and similar laws, (ix) the possible failure of the companies to maintain their respective qualifications as a REIT and the risk of changes in laws affecting REITs, (x) the possibility of uninsured losses, (xi) risks associated with redevelopment and repositioning projects, including delays and cost overruns, (xii) the risk of a material failure, inadequacy, interruption or security failure of the companies’ or their respective hotel managers’ information technology networks and systems, (xiii) risks associated with achieving expected revenue synergies or cost savings, (xiv) risks associated with the companies’ ability to consummate the proposed merger transaction and the timing of the closing of the proposed merger transaction, and (xv) those additional risks and factors discussed in reports filed with the SEC by Pebblebrook and LaSalle from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Forms 10-K and 10-Q. Neither Pebblebrook nor LaSalle undertakes any duty to update any forward-looking statements appearing in this document.<doc-sep>
(Bloomberg)—LaSalle Hotel Properties, whose high-end hotels include the Westin Copley Place in Boston and the Park Central New York, agreed to be purchased by Pebblebrook Hotel Trust after terminating a planned takeover by Blackstone Group. LaSalle owns the Hotel Chicago—formerly the House of Blues Hotel—and the Mag Mile Westin. Pebblebrook will exchange 0.92 common share for each LaSalle share, and LaSalle stockholders will have the option of receiving $37.80 a share in cash for as much as 30 percent of the deal, the companies said in a statement today. The total value of the deal is about $5.2 billion, according to the statement. LaSalle said yesterday that it rejected a $33.50-a-share all-cash takeover offer from Blackstone, determining that the competing bid from Pebblebrook was a superior proposal. Pebblebrook has spent almost half a year in pursuit of LaSalle, announcing its first all-stock bid in March. The lingering prospect of a merger of the two real estate investment trusts has helped LaSalle’s stock stay consistently above Blackstone’s offer of roughly $4.8 billion including debt since that agreement was announced in May. “We are very pleased to have reached an agreement to bring Pebblebrook and LaSalle together in a strategic combination that represents a terrific value-maximizing opportunity for both LaSalle and Pebblebrook shareholders,” Pebblebrook CEO Jon Bortz said in the statement. LaSalle paid Blackstone a $112 million breakup fee today, according to a regulatory filing. LaSalle will sell three of its hotels, with about 1,600 guest rooms, as part of the agreement with Pebblebrook. After the sale, the combined company will have 66 high-end hotels and resorts in or near 16 U.S. urban markets. The deal is expected to be completed in the fourth quarter. Bortz will continue as chairman, president and CEO of Pebblebrook after the takeover. LaSalle shareholders had been scheduled to vote today on the Blackstone proposal. Two prominent shareholder-advisory firms, Institutional Shareholder Services and Glass Lewis & Co., issued reports last month recommending that investors oppose Blackstone’s offer and arguing that Pebblebrook’s bid was superior. HG Vora Capital Management, which had 9.1 percent of LaSalle’s shares when the offer was accepted, had said it planned to vote against a Blackstone takeover because it didn’t maximize value for shareholders. Pebblebrook itself, which owns 9.8 percent of LaSalle, had said it would vote against Blackstone’s bid. The Blackstone takeover would have required the approval from investors representing two-thirds of LaSalle’s shares. More: Rosemont hotels hit the market New Hilton at McCormick Place ups the challenge for downtown hotels