DENVER AND PHILADELPHIA — Hersha Hospitality Trust (NYSE: HT) and KSL Capital Partners LLC have entered a definitive merger agreement under which affiliates of KSL will acquire all the outstanding common shares of Hersha for $10 per share in an all-cash transaction valued at approximately $1.4 billion.
Philadelphia-based Hersha is a self-advised real estate investment trust in the hospitality sector, owning and operating luxury and lifestyle hotels in coastal gateway and resort markets. The company’s 25 hotels total 3,811 rooms and are located in New York, Washington, D.C., Boston, Philadelphia, South Florida and California.
KSL is a private equity firm specializing in travel and leisure enterprises in five primary sectors: hospitality, recreation, clubs, real estate and travel services. In addition to its Denver headquarters, the firm also maintains offices in New York City, Stamford, Conn., and London.
The purchase price represents a premium of approximately 60 percent over Hersha’s closing share price on Friday, Aug. 25, the last full trading day prior to the announcement. Upon completion, Hersha will no longer be publicly traded.
“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. “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 merger agreement was unanimously approved by Hersha’s full Board of Trustees. The transaction is expected to close in the fourth quarter, subject to customary closing conditions, including approval by the holders of a majority of Hersha’s outstanding common shares as set forth in the merger agreement.
Goldman Sachs & Co. LLC is serving as exclusive financial advisor, and Latham and Watkins LLLP and Venable LLP are serving as legal advisors to the Transaction Committee of Hersha’s Board of Trustees. Hunton Andrews Kurth LLP is serving as legal advisor to Hersha.
Wells Fargo and Citigroup are serving as financial advisors, and Simpson Thacher & Bartlett LLP and Miles and Stockbridge PC are serving as legal advisors to KSL. Additionally, Wells Fargo and Citigroup provided a debt financing commitment to KSL in connection with the transaction.
— Kristin Harlow