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Pebblebrook Urges LaSalle Hotel Properties Shareholders to Vote Against Proposed Sale to Blackstone


Pebblebrook Hotel Trust recently filed a preliminary proxy statement with the United States Securities and Exchange Commission to urge shareholders of LaSalle Hotel Properties to vote with Pebblebrook against LaSalle’s merger agreement with BRE Landmark L.P., an affiliate of The Blackstone Group L.P. 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.

In the filing, Bortz continued that: “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.”

To read The REIT Wire’s full coverage of the ongoing discussions of the deal, click the below articles.

Pebblebrook Hotel Trust Submits Revised Higher Offer to Buy LaSalle Hotel Properties
LaSalle Hotel Properties Tells Pebblebrook It is “Open-Minded” About Latest Offer
Pebblebrook Revises Merger Proposal to LaSalle, Raises Offer Price
LaSalle Rejects Pebblebrook Proposal
Pebblebrook’s Proposed LaSalle Hotel Merger “Makes Sense”
Pebblebrook Hotel Trust Completes Sale of the Dumont NYC
LaSalle, Blackstone Deals Is a Go