US: Travel and leisure investment firm KSL Capital Partners is set to acquire luxury and lifestyle hotel owner Hersha Hospitality Trust in an all-cash transaction valued at approximately $1.4 billion.
KSL will acquire all common shares of Hersha at $10. Holders of Hersha’s 6.87 per cent Series C Cumulative Redeemable Preferred Shares, 6.50 per cent Series D Cumulative Redeemable Preferred Shares, and 6.5 per cent Series E Cumulative Redeemable Preferred Shares, will receive $25 in cash plus any accrued and unpaid dividends.
The purchase price of Hersha represents a 60 per cent premium over the company’s closing share price on 25 August this year – the last full trading day prior to announcing the deal.
Hersha’s portfolio features 25 hotels totalling 3,811 rooms across New York, Washington DC, Boston, Philadelphia, South Florida, and California.
Jay Shah, executive chairman of Hersha, said: “This transaction provides our shareholders with immediate and certain value at a substantial premium to our public valuation. Following a multi-year comprehensive review by the independent transaction committee of Hersha’s board of trustees, the board and management team are confident this step will allow us to deliver value for our shareholders while refocusing on growing the business over a longer period of time.”
Neil Shah, Hersha’s CEO, added: “We are proud of the work our team has done to build on Hersha’s culture and capabilities and make the company what it is today. This transaction is a result of our deliberate actions to focus on key gateway markets and lifestyle and leisure properties, as well as our work to create a concentrated portfolio consisting of some of the highest quality hotels in their respective markets.”
Marty Newburger, partner at KSL, said: “Hersha and its team have built an impressive, curated portfolio of experiential luxury and lifestyle hotels and resorts in strategic markets. With KSL’s extensive track record investing in high-quality assets in dynamic metropolitan markets across North America and around the world, we are uniquely suited to position the business for further success over the long term.”
The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions.