RLJ Shares Plummet As $7B FelCor Acquisition Looms
RLJ Lodging Trust and FelCor Lodging Trust's $7B deal to create the industry's largest hotel-focused REIT is experiencing some major pushback.
RLJ's share price has taken a beating ever since the deal was announced in April. As of Tuesday its stock was trading at $20.78/share, down more than 15% from last year, Hotel News Now reports.
The hotelier also reported a net income drop of 27.7% to $42.5M in Q2. Still pending shareholder approval, the all-stock merger is in jeopardy of not moving forward, the Wall Street Journal reports. Analysts claim the deal is too pricey, and investors have been wary of the transaction since RLJ announced it was approached by a potential buyer willing to pay a 20% premium on its stock price.
RLJ President and CEO Ross Bierken remains optimistic about the company’s performance.
“With our most challenging quarter now behind us, we look forward to lapping easier comps starting late in the third quarter and benefiting from a number of tailwinds next year,” Bierken said in a statement.
The shareholder vote is expected to take place on Aug. 15.