Red Lion Hotels Corp., Spokane, Washington, said Wednesday that it may sell its hotel chain.
The company has hired Bank of America Merrill Lynch to explore its options. The move comes after prominent shareholders in Red Lion, including Columbia Pacific Opportunity Fund, Seattle, which owns 29%, urged it to do so after four years of red ink. Columbia Pacific passed on a proposal to buy the remainder of Red Lion in 2008.
“This is the first public acknowledgment by the company that it is open to a sale,” said David Loeb, an analyst at Baird Equity Research. “We view a publicly traded hotel company as an unlikely buyer of Red Lion’s 30 owned hotels. Value could be unlocked by incorporating Red Lion’s assets into a stronger brand platform or deploying much-needed capital to fund growth initiatives.”
Red Lion operates 30 hotels and has 18 under franchise all located in the western U.S. and Canada. The hotels will continue to operate as normal.
