RLJ Lodging Trust disclosed on Monday it received unsolicited, nonbinding proposal in mid-June from a private equity investor to acquire the company in an all-cash transaction.
According to a report on Monday from Baird Equity Research, the first proposal was at $24/share; the revised proposal was at $25/share; the third proposal was $25.50/share; and following due diligence, the most recent proposal was at $24/share, for which RLJ’s board decided it could not reasonably be expected to lead to a “superior proposal” per the merger agreement.
Baird further stated if RLJ terminates the FelCor Lodging Trust merger agreement to accept a “superior proposal,” RLJ would be required to pay a US$95 million termination fee.
The private equity offer contemplates termination of the FCH-RLJ merger agreement, the discontinuation of RLJ dividends following the consummation of a merger agreement, and no apparent financing contingencies.
Additionally, the shareholder votes for the FCH-RLJ merger have been pushed back slightly; the new shareholder meetings are scheduled for August 15 (versus August 7 previously).