Dealmaker: Pebblebrook Hotel Trust, LaSalle Hotel Properties to Merge in $5.2B Deal

Pebblebrook Hotel Trust and LaSalle Hotel Properties, both real estate investment trusts headquartered in Bethesda, Md., agreed to merge in a deal valued at $5.2 billion.

Under the agreement Pebblebrook will acquire 100 percent of LaSalle’s outstanding common shares. Each LaSalle shareholder will receive either $37.80 in cash or 0.92 Pebblebrook common shares for each LaSalle common share owned.

In May, LaSalle had entered into a merger agreement with private equity fund Blackstone, New York, under which Blackstone would acquire all outstanding common LaSalle shares for $33.50 per share in an all-cash transaction valued at $4.8 billion. LaSalle’s board of directors terminated that agreement last week.

Raymond James and BofA Merrill Lynch acted as financial advisors and Hunton Andrews Kurth LLP acted as legal counsel to Pebblebrook. Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC acted as LaSalle’s financial advisors and Goodwin Procter LLP and DLA Piper LLP acted as legal counsel.

LaSalle Hotel Properties President and CEO Michael Barnello noted the transaction represented a 48 percent premium compared to LaSalle’s prior share price.

Both firms’ boards unanimously approved the transaction and expect the transaction to close in the fourth quarter subject to customary closing conditions.

Jon Bortz will continue to serve as Pebblebrook Chairman, President and CEO upon closing; Raymond Martz will continue to serve as Pebblebrook Executive Vice President, Chief Financial Officer, Treasurer and Secretary and Thomas Fisher will continue to serve as Pebblebrook Executive Vice President and Chief Investment Officer. The Pebblebrook Board will remain unchanged.

Following the transaction’s close, Pebblebrook will have a portfolio of 662 assets in or near 16 urban markets.