The Wall Street Journal reported on Thursday that people familiar with the Cerberus Capital Management and Chatham Lodging Trust deal to buy 64 Innkeepers USA Trust hotels for US$1.12 billion said the closing of the purchase is being delayed because Cerberus is not prepared to complete the transaction.
The article reports that Cerberus did not give specific reasons for the delay and did not say it was abandoning the deal, a joint venture with Chatham Lodging Trust. The deadline to close the sale is Sept. 15.
Among the deal’s term is a provision that Cerberus can terminate the purchase if a development appears that could have a “material adverse effect” on Innkeepers’ business, and that the recent worldwide stock market turbulence since the U.S. credit downgrade by Standard & Poor’s may have prompted the decision to delay, which could be a negotiating tactic for a lower price.