BETHESDA, Md.--(BUSINESS WIRE)--
Pebblebrook Hotel Trust (NYSE:PEB) (“Pebblebrook”) today announced it
has filed a preliminary proxy statement with the United States
Securities and Exchange Commission (“SEC”) to urge shareholders of
LaSalle Hotel Properties (NYSE:LHO) (“LaSalle”) to vote with Pebblebrook
against LaSalle’s merger agreement with BRE Landmark L.P. (“BRE”), an
affiliate of The Blackstone Group L.P. (NYSE:BX) (together with BRE,
“Blackstone”) at a price of $33.50 per share.
“The Board of Pebblebrook continues to believe that its offer is
substantially superior to LaSalle’s merger agreement with Blackstone and
represents the greatest value-maximizing opportunity for the
shareholders of both LaSalle and Pebblebrook,” said Jon Bortz, Chairman,
President and Chief Executive Officer of Pebblebrook Hotel Trust. “The
shareholders of LaSalle wholeheartedly agree with us as LaSalle’s shares
continue to trade at prices well above Blackstone’s take-under price of
$33.50. As presented in the LaSalle proxy, the LaSalle Board’s only
rationale for not accepting our offer as superior, despite our much
higher offer price, was a concern over certainty. Pebblebrook strongly
disagreed with the LaSalle Board’s decision at the time, and given the
trading prices and volume of LaSalle shares since the announcement of
the Blackstone deal, it is even more clear today that Pebblebrook’s
offer is superior. The facts and circumstances have changed materially
since the LaSalle Board decided to reject our higher offer: since the
announcement of the Blackstone agreement, over 100 million LaSalle
shares have traded, and all above $33.50. Over that same period, over 30
million LaSalle shares have traded over $35.00. The trading activity in
LaSalle shares after the Blackstone announcement means that any
shareholder who wanted certainty at $33.50 has had the opportunity to
realize that value or more, an opportunity that continues today.
Certainly protecting that price can no longer be justified as a
rationale for rejecting our superior offer and moving forward with a
transaction at a price well below the current market price of LaSalle
shares. The Blackstone offer does not protect LaSalle shareholders – it
harms them, a point underscored by the egregious transfer of incremental
value from LaSalle shareholders to Blackstone seen in Blackstone’s
current marketing of LaSalle hotel assets to be sold contemporaneously
with the close of their proposed transaction. We have made repeated
efforts to engage with LaSalle, yet the LaSalle Board has continued to
ignore overwhelming shareholder support for our proposal and is pursuing
a course of action that shareholders oppose. We have therefore filed a
preliminary proxy statement to solicit shareholders to vote against the
Blackstone merger agreement.
“We believe LaSalle’s Board should reconsider the agreement with
Blackstone in accordance with its ongoing fiduciary duties and recognize
their shareholders’ clear preference for the immediate higher
incremental value and future upside potential of Pebblebrook’s current
outstanding offer, and deem Pebblebrook’s current offer 'Superior'
today. If the LaSalle Board fails to meet its ongoing fiduciary duties
and continues to recommend the lower Blackstone take-under agreement,
and LaSalle proceeds to a proxy vote, then a vote with us 'AGAINST' the
Blackstone agreement would send a clear message to the LaSalle Board
that LaSalle shareholders prefer the Pebblebrook offer. The LaSalle
proxy makes it clear that the LaSalle Board already determined the
Pebblebrook offer to be superior to LaSalle remaining independent, and
the value of Pebblebrook’s offer has only increased and become more
fixed since that determination. Accordingly, if the LaSalle shareholders
do not approve the Blackstone agreement, it stands to reason that the
LaSalle Board should agree to the Pebblebrook offer. The Pebblebrook
offer allows LaSalle shareholders to realize far greater value today,
and with Pebblebrook’s track record of success as a public company and
our extensive knowledge of LaSalle’s assets and markets, we are
positioned to provide shareholders of the combined company with
significant long-term upside. We urge the LaSalle Board to engage with
us immediately and enter into an agreement that is truly in the best
interests of its shareholders. We believe a transaction can be completed
within the next 90 to 120 days, with approval from both sets of
shareholders.”
In its preliminary proxy statement filed today, Pebblebrook urges
LaSalle shareholders to vote with Pebblebrook “AGAINST” all three of the
proposals relating to the Proposed BRE Merger by:
-
Voting “AGAINST” the proposal to approve the Proposed BRE Merger dated
as of May 20, 2018;
-
Voting “AGAINST” the proposal to approve, on a non-binding, advisory
basis, the compensation that may be paid or become payable to
LaSalle’s named executive officers that is based on or otherwise
relates to the Proposed BRE Merger; and
-
Voting “AGAINST” the proposal to approve any adjournment of the
LaSalle Special Meeting for the purpose of soliciting additional
proxies if there are not sufficient votes at the Special Meeting to
approve the BRE Merger Proposal.
Pebblebrook’s June 11, 2018 superior offer for a strategic combination
with LaSalle remains outstanding, and Pebblebrook is prepared to move
forward with it immediately. As previously disclosed on June 22, 2018,
Pebblebrook intends to vote its 10.8 million LaSalle common shares
“AGAINST” the BRE Merger Proposal. A presentation with additional
details regarding Pebblebrook’s offer and the merger rationale for this
strategic combination is available at investor.pebblebrookhotels.com.
Details of Pebblebrook’s Compelling Offer
On March 6, 2018, April 13, 2018, April 20, 2018 and May 19, 2018,
Pebblebrook made proposals to the LaSalle Board regarding a merger
transaction pursuant to which LaSalle would become a wholly-owned
subsidiary of Pebblebrook. On May 21, 2018, LaSalle announced it had
entered into a merger agreement with BRE Landmark L.P., an affiliate of
The Blackstone Group LP at a price of $33.50 per share in cash, a
significantly lower share price than the value of Pebblebrook’s offer,
and significantly below LaSalle’s current share price.
On June 11, 2018, Pebblebrook submitted an increased offer to combine
strategically with LaSalle. To date, Pebblebrook has not been contacted
by LaSalle or its advisors regarding its increased offer. Pebblebrook’s
most recent proposal for 100% of LaSalle’s outstanding common shares
represented an implied price of $37.80 per LaSalle common share based on
a fixed exchange ratio of 0.92 Pebblebrook common share for each LaSalle
common share and Pebblebrook’s 5-day VWAP as of June 8, 2018.1
Based on Pebblebrook’s 5-day VWAP and 30-day VWAP, as of July 9, 20182,
the current market value of Pebblebrook’s offer provides a premium of
$2.61 or 7.8% and $3.33 or 9.9% respectively over the $33.50 per share
price in the Proposed BRE Merger. Pebblebrook’s offer takes into account
and is net of the $112 million termination fee LaSalle agreed to pay
Blackstone, which will be payable by Pebblebrook and not borne by
LaSalle’s shareholders, other than as ongoing shareholders in the
combined company.
Pebblebrook’s increased offer of June 11, 2018 provides LaSalle’s common
shareholders with the option for each share to elect to receive $37.80
in cash instead of 0.92 Pebblebrook common share, subject to a cap of
20% of LaSalle common shares in aggregate receiving cash and customary
pro ration if the number of LaSalle holders electing to receive cash
instead of shares is oversubscribed. LaSalle’s shareholders may elect to
receive a mix of cash and Pebblebrook shares, and can receive up to 100%
in cash if no more than 20% of shares in the aggregate elect the cash
option. The per share cash amount is fixed at $37.80, which provides
downside protection for LaSalle shareholders by anchoring approximately
$834 million of the offer in cash. In the face of steadily improving
industry fundamentals, the value of Pebblebrook’s shares would have to
decline to $35.24 to eliminate its premium to the Proposed BRE Merger
price of $33.50 per LaSalle share.
On June 18, 2018, Pebblebrook reaffirmed its June 11, 2018 proposal and
announced it had almost doubled its ownership of common shares of
LaSalle to 10.0 million common shares, or approximately 9.0% of
LaSalle’s outstanding common shares, to become one of LaSalle’s largest
shareholders. On the same day, LaSalle reaffirmed its support for the
Proposed BRE Merger after the LaSalle Board determined that the
Pebblebrook proposal did not constitute, and could not reasonably be
expected to lead to, a “Superior Proposal” as defined in the Proposed
BRE Merger Agreement. In contrast to the LaSalle Board, Pebblebrook
believes that its offer is superior because it provides LaSalle
shareholders: (i) an opportunity to realize a significant premium for
their common shares over and above the Proposed BRE Merger; (ii) an
opportunity to participate in the combined company, benefitting from
improving economic and hotel industry fundamentals and Pebblebrook’s
well-positioned portfolio as augmented by LaSalle’s portfolio; and (iii)
the opportunity to realize a 55% higher annualized dividend based on
Pebblebrook’s current annualized dividend rate of $1.52 per Pebblebrook
share multiplied by the 0.92 proposed exchange ratio compared to
LaSalle’s current annualized dividend of $0.90 per LaSalle share.
As described in the preliminary proxy statement filed by LaSalle with
the SEC on June 18, 2018, the Proposed BRE Merger must be approved by
the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66 2/3%) of the outstanding LaSalle common shares as of the
record date for the special meeting. As disclosed in the Schedule 13D
Pebblebrook filed with the SEC on June 22, 2018, Pebblebrook owns
approximately 10.8 million common shares, or approximately 9.8% of
LaSalle’s outstanding common shares.
Raymond James and BofA Merrill Lynch are acting as financial advisors,
Hunton Andrews Kurth LLP is acting as legal counsel and Okapi Partners
LLC is serving as information agent to Pebblebrook in connection with
the proposed transaction.
1 Incremental value based on Pebblebrook’s 5-day VWAP of
$41.09 as of June 8, 2018.
2 Based on Pebblebrook’s closing price of $38.89 as of July
9, 2018/Pebblebrook’s 5-day VWAP of $38.80 and the 30-day VWAP of $39.77
as of July 9, 2018.
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.
ADDITIONAL INFORMATION
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. This communication relates to a
proposal which Pebblebrook has made for a business combination
transaction with LaSalle. In furtherance of this proposal and subject to
future developments, Pebblebrook (and, if a negotiated transaction is
agreed, LaSalle) may file one or more registration statements, proxy
statements, tender or exchange offer statements, prospectuses or other
documents with the SEC. This communication is not a substitute for any
proxy statement, registration statement, tender or exchange offer
statement, prospectus or another document Pebblebrook or LaSalle may
file with the SEC in connection with the proposed transaction. INVESTORS
AND SECURITY HOLDERS OF PEBBLEBROOK AND LASALLE ARE URGED TO READ ANY
SUCH PROXY STATEMENT, REGISTRATION STATEMENT, TENDER OR EXCHANGE OFFER
STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any
definitive proxy statement or prospectus (if and when available) will be
delivered to shareholders of LaSalle or Pebblebrook, as applicable.
Investors and security holders will be able to obtain free copies of
these documents (if and when available) and other documents filed with
the SEC by Pebblebrook through the website maintained by the SEC at http://www.sec.gov.
Pebblebrook or LaSalle and their respective trustees and 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 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. You can find information
about LaSalle’s executive officers and trustees in LaSalle’s definitive
proxy statement filed with the SEC on March 22, 2018. Additional
information regarding the interests of such potential participants will
be included in one or more registration statements, proxy statements,
tender or exchange offer statements or other documents filed with the
SEC if and when they become available. You may obtain free copies of
these documents using the sources indicated above.
This document 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.
Forward-Looking Statements
This communication may include “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
regarding Pebblebrook’s offer to acquire LaSalle, its financing of the
proposed transaction, its expected future performance (including
expected results of operations and financial guidance), and the combined
company’s future financial condition, operating results, strategy and
plans. Forward-looking statements may be identified by the use of the
words “anticipates,” “expects,” “intends,” “plans,” “should,” “could,”
“would,” “may,” “will,” “believes,” “estimates,” “potential,” “target,”
“opportunity,” “tentative,” “positioning,” “designed,” “create,”
“predict,” “project,” “seek,” “ongoing,” “upside,” “increases” or
“continue” and variations or similar expressions. These statements are
based upon the current expectations and beliefs of management and are
subject to numerous assumptions, risks and uncertainties that change
over time and could cause actual results to differ materially from those
described in the forward-looking statements. These assumptions, risks
and uncertainties include, but are not limited to, assumptions, risks
and uncertainties discussed in Pebblebrook’s most recent annual or
quarterly report filed with the SEC and assumptions, risks and
uncertainties relating to the proposed transaction, as detailed from
time to time in Pebblebrook’s and LaSalle’s filings with the SEC, which
factors are incorporated herein by reference. Important factors that
could cause actual results to differ materially from the forward-looking
statements made in this communication are set forth in other reports or
documents that Pebblebrook may file from time to time with the SEC, and
include, but are not limited to: (i) the ultimate outcome of any
possible transaction between Pebblebrook and LaSalle, including the
possibilities that LaSalle will reject a transaction with Pebblebrook,
(ii) the ultimate outcome and results of integrating the operations of
Pebblebrook and LaSalle if a transaction is consummated, (iii) the
ability to obtain regulatory approvals and meet other closing conditions
to any possible transaction, including the necessary shareholder
approvals, and (iv) the risks and uncertainties detailed by LaSalle with
respect to its business as described in its reports and documents filed
with the SEC. All forward-looking statements attributable to Pebblebrook
or any person acting on Pebblebrook’s behalf are expressly qualified in
their entirety by this cautionary statement. Readers are cautioned not
to place undue reliance on any of these forward-looking statements.
These forward-looking statements speak only as of the date hereof.
Pebblebrook undertakes no obligation to update any of these
forward-looking statements to reflect events or circumstances after the
date of this communication or to reflect actual outcomes.
For additional information or to receive press releases via email,
please visit our website at www.pebblebrookhotels.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180710005301/en/
Pebblebrook Hotel Trust
Jon E. Bortz, 240-507-1300
Chairman
and Chief Executive Officer
or
Raymond D. Martz, 240-507-1330
Executive
Vice President and Chief Financial Officer
or
Sard Verbinnen &
Co
Liz Zale, Pam Greene or Stephen Pettibone, 212-687-8080
or
Okapi
Partners
Pat McHugh or Jon Einsidler, 212-297-0720 or 855-305-0855
Source: Pebblebrook Hotel Trust