RICHMOND, VA-Apple REIT Seven, Apple REIT Eight and Apple REIT Nine have entered into a definitive merger agreement in which Apple Seven and Apple Eight will combine with Apple Nine in two merger transactions. The board of directors for each REIT approved the transactions. Now the deal must gain approval from shareholders. The company plans to distribute a joint proxy statement/prospectus to shareholders during the fourth quarter of 2013.
If the transaction is approved, Apple Nine will become self-advised and each company will terminate its advisory arrangements with its advisors.
Glade M. Knight, chairman and CEO, notes the combined company will be one of the largest hospitality REITs with 191 hotels consisting of 23,711 rooms in 33 states. "Due to the increased size and scale of the combined company, we believe that it will be better positioned to pursue enhanced avenues of liquidity for our shareholders through the exploration of certain strategic alternatives such as possibly listing the combined company on an exchange, a sale of the combined company or a merger with a third party company and to have access to more attractive financing," he says in a prepared statement.
McGuireWoods LLP is corporate counsel to each company. Foley & Lardner LLP is acting as legal advisor, and BofA Merrill Lynch is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Seven. Kaufman & Canoles, P.C. is acting as legal advisor, and KeyBanc Capital Markets is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Eight. Hogan Lovells US LLP is acting as legal advisor, and Citigroup Global Markets Inc. is acting as financial advisor, to the Special Committee of the Board of Directors of Apple Nine in connection.
The Apple REIT family of companies has a broad array of interests – successful interests as the recent sale of Apple REIT Six to BRE Select Hotels Corp, an affiliate of Blackstone Real Estate Partners VII, earlier this year for $1.2 billion indicates.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
