JER To Buy Highland Hospitality for $2B

McLEAN, VA-Affiliates of JER Partners Acquisitions IV LLC have agreed to buy locally based Highland Hospitality Corp. for $2 billion in cash. Highland Hospitality Corp. is a lodging REIT based here that focuses on the premium and upscale full-service and limited-service markets.

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.