Hersha Hospitality Trust and KSL Capital Partners LLC announced a definitive merger agreement, under which affiliates of KSL will acquire all the outstanding common shares of Hersha for $10 per share, last month. The transaction is valued at approximately $1.4 billion.
“This transaction provides our shareholders with immediate and certain value at a substantial premium to our public valuation,” says Jay H. Shah, Hersha’s executive chairman, in a prepared statement. “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.”
Under the terms of the agreement, Hersha shareholders will receive $10 in cash for each common share they own, and holders of Hersha’s 6.875% Series C Cumulative Redeemable Preferred Shares, 6.50% Series D Cumulative Redeemable Preferred Shares, and 6.50% Series E Cumulative Redeemable Preferred Shares will receive $25.00 in cash, plus any accrued and unpaid dividends to which they are entitled, for each preferred share they own.
“Hersha and its team have built an impressive, curated portfolio of experiential luxury and lifestyle hotels and resorts in strategic markets,” says Marty Newburger, partner at KSL, in a prepared statement. “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 final quarter of 2023.
