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LaSalle Considering Pebblebrook's Latest Offer, Saying It Could Be A 'Superior Proposal' To Blackstone's

The Hotel Palomar in Dupont Circle, one of LaSalle's nine D.C. holdings

LaSalle Hotel Properties will consider the latest offer from Pebblebrook Hotel Trust, at least the fifth acquisition bid the REIT has made, despite its upcoming vote on its merger with Blackstone

After Pebblebrook increased its offer Tuesday, LaSalle's board Monday decided unanimously that the bid could reasonably represent a "superior proposal," a term defined in its agreement with Blackstone. 

LaSalle had rejected Pebblebrook's previous offers because they included only 20% cash and the rest in stock, which has the potential to fluctuate, but the latest offer consists of 30% cash at a fixed amount of $37.80/share.

The Blackstone deal would be an all-cash transaction at $33.50/share, valuing LaSalle at $4.8B. LaSalle scheduled a shareholder vote on the deal for Sept. 6 after rejecting Pebblebrook's previous offer last month. The agreement it signed with Blackstone allows LaSalle to entertain other offers if it determines one could be a "superior proposal," as LaSalle's board did Monday, but it would have to pay a $112M fee if it decides to terminate the Blackstone deal. 

Two financial advisory firms published reports last week, after Pebblebrook's latest offer, recommending shareholders vote against the Blackstone deal. Pebblebrook also owns 9.8% of LaSalle's common shares and has been speaking with other investors about rejecting the Blackstone deal. 

LaSalle, a Bethesda-based hospitality REIT, owns 41 properties totaling 10,400 rooms in 11 markets, including nine in D.C. It is working with Citigroup Global Markets and Goldman Sachs as financial advisers, plus Goodwin Procter and DLA Piper as legal counsel.