Blackstone Group (NYSE: BX)announced on Monday that it will be buy LaSalle Hotel Properties (NYSE: LHO) for $3.7 billion in cash. LaSalle shares rose by 5.6 percent midday on Monday.
The transaction is valued at $4.8 billion, including LaSalle’s debt.
LaSalle decided to sell itself to Blackstone after rejecting a bid from its competitor Pebblebrook Hotel Trust (NYSE: PEB). Pebblebrook previously raised its bid in late April after LaSalle rejected its original bid.
“We are pleased to have reached this agreement with Blackstone, which we believe is in the best interests of our shareholders and represents the culmination of a thorough review of strategic alternatives,” said Stuart Scott, Chairman of the Board of LaSalle.”
Pebblebrook offered LaSalle $35.89 per share, representing a 7.1 percent premium over Blackstone’s offer off $33.50.
“Our offer is substantially superior to the merger agreement that LaSalle has reached with Blackstone,” said Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “We continue to believe that our offer maximizes immediate and long-term value for LaSalle’s shareholders.”
“We are disappointed that LaSalle’s board of trustees has chosen not to pursue the unique opportunity that we presented.” concluded Bortz.
Blackstone’s acquisition of LaSalle comes shortly after its exiting of Hilton Worldwide Holdings Inc. on Friday. After holding a position for nearly 11 years, Blackstone is selling about 5.8 percent of its stake or 15.8 million shares for $1.32 billion, according to Reuters.
The transaction is expected to close in the third quarter of 2018.