Red Lion Hotels Corp. announced on Tuesday that it has ruled out a company sale after receiving no offers from potential buyers.
In March Red Lion Hotels Corp., Spokane, Washington, said it hired Bank of America Merrill Lynch to explore its selling options, including a potential sale of the company or a strategic combination with a third party. This came after Columbia Pacific Opportunity Fund, Seattle, the largest shareholder of Red Lion at 29%, urged the hotel company to put itself up for sale after four years of red ink.
Red Lion said its advisors contacted more than 75 potentially interested strategic industry and financial partners, including those that had expressed interest directly to the company or were referred to the company by shareholders. While Red Lion received a limited number of non-binding indications of interest, but did not ultimately receive any offers. After taking into account the recommendation of the strategic alternatives committee, the board decided to suspend the formal strategic alternatives process.
Instead, Red Lion said its present focus is on executing its current business plan, which includes the sale of non-core assets and reduction of debt, noting recent sales of properties.
“We are also marketing several other non-core assets and we are in discussions with a number of current property owners to potentially franchise additional hotels. We remain committed to executing our current business plan and considering all strategies to maximize shareholder value. We are confident that we are taking the right steps to further strengthen the company’s balance sheet,” said Jon Eliassen, Red Lion president and CEO.
Red Lion also announced that its chairman of the board, Richard Barbieri decided to retire from the board effective December 31 or the date on which the company appoints his replacement.