The two firms entered into an agreement in which JER would assume Highland's approximately $260-million existing debt and acquire all of its outstanding common stock and operating partnership units for $19.50 per share. As part of the acquisition agreement, no future dividends will be paid on the common stock.
The purchase price is a 15% premium over Highland's three-month average closing share price, according to the companies. Should the merger close, JER will add 27 hotel properties with an aggregate of 8,379 rooms in 14 states and DC to its portfolio. The firm now holds an interest in more than 17,000 rooms in 170 properties.
Bear, Stearns & Co. Inc. and Merrill Lynch & Co. acted as financial advisors to Highland. Hogan & Hartson LLP was its legal advisor. Wachovia Securities and Citi were JER's financial advisors. Acquisition financing is being provided by Wachovia Bank. O'Melveny & Myers LLP, Allen & Overy LLP and Venable LLP acted as JER's counsel.
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