Ownership Stake Is Approximately 9.0% of
LaSalle’s Outstanding Common Shares
Pebblebrook Hotel Trust (NYSE: PEB) (“Pebblebrook”) today
announced it has almost doubled its ownership of common shares of
LaSalle Hotel Properties (NYSE: LHO) (“LaSalle) to 10.0 million
common shares, or approximately 9.0% of LaSalle’s outstanding
common shares. Pebblebrook is now one of the largest shareholders
of LaSalle.
“The Board of Pebblebrook continues to believe that a strategic
combination with LaSalle represents the greatest value-maximizing
opportunity for the shareholders of both LaSalle and Pebblebrook,”
said Jon E. Bortz, Chairman, President and Chief Executive Officer
of Pebblebrook Hotel Trust. “Our large, increased ownership
position further demonstrates our commitment and determination to
complete this combination. We are not surprised by the broad
support we have received from shareholders, who have told us and
LaSalle that our current proposal is clearly superior to LaSalle’s
agreement with Blackstone. We are surprised that LaSalle’s Board
does not recognize our proposal to be superior. Our cash and shares
offer provides LaSalle’s shareholders with approximately $375
million of incremental value1 compared to the Blackstone agreement.
Given that the LaSalle Board continues to recommend the Blackstone
agreement, this would be an egregious transfer of value to
Blackstone that would be a gross disservice to all LaSalle
shareholders, especially given the upside potential of owning
shares in a combined entity that will benefit from the growth and
the meaningful operational and investment synergies that would
result from bringing these two highly similar companies together.
Pebblebrook remains prepared to make sure the incremental value of
our June 11, 2018 offer does not go to Blackstone, and our offer
remains outstanding. We request that the LaSalle Board listen to
its shareholders and exercise its fiduciary duty to act in the best
interests of all of its shareholders by finalizing a merger
agreement with Pebblebrook.”
Pebblebrook submitted its increased offer to the Board of
Trustees of LaSalle on June 11, 2018. To date, Pebblebrook has not
been contacted by LaSalle or its advisors regarding the June 11,
2018 increased offer. Pebblebrook’s offer provides LaSalle’s common
shareholders with the option for each share to elect to receive
$37.80 in cash instead of 0.92 Pebblebrook share, subject to a cap
of 20% of LaSalle shares in aggregate receiving cash and customary
pro ration if the number of LaSalle holders electing to receive
cash instead of stock 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, and was calculated by multiplying the fixed exchange ratio
of 0.92 and Pebblebrook’s 5-day VWAP of $41.09 as of June 8, 2018.
In the face of steadily improving industry fundamentals, the value
of Pebblebrook’s stock would have to decline to $35.24 in order to
equal LaSalle’s agreement with Blackstone. Our offer 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. In compliance with federal law, Pebblebrook will file
a Schedule 13D regarding its ownership of LaSalle common
shares.
1 Incremental value based on Pebblebrook’s 5-day VWAP of $39.83
as of June 15, 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 United States
Securities and Exchange Commission (the “SEC”). This communication
is not a substitute for any proxy statement, registration
statement, tender or exchange offer statement, prospectus or other
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20180618005612/en/
Pebblebrook Hotel TrustJon E. Bortz, Chairman and Chief
Executive Officer240-507-1300orRaymond D. Martz, Executive Vice
President and Chief Financial Officer240-507-1330orSard Verbinnen
& CoLiz Zale, Pam Greene or Stephen
Pettibone212-687-8080orOkapi PartnersPat McHugh or Jon
Einsidler212-297-0720 or Toll Free: 855-305-0855
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