A LaSalle Hotel holding

BETHESDA, MD--Pebblebrook Hotel Trust sent the Board of Directors of LaSalle Hotel Properties a reminder and a request: it is interested in a combination between the two hotel REITs and it wants the LaSalle Board reevaluate its proposal “given the current facts and circumstances” and determine it to be “Superior.”Pebblebrook noted that LaSalle has neither filed a definitive proxy nor set a meeting date to put the deal to a vote. The reason, as Pebblebrook strongly implies, is because LaSalle shareholders don't want the proposed Blackstone acquisition. “It is absolutely clear that LaSalle shareholders will not approve LaSalle's merger with Blackstone,” Pebblebrook said in a letter to LaSalle's Board. “We strongly believe that LaSalle shareholders will readily approve a strategic combination of our two companies on the terms set forth in our offer, if you give them a chance to do so.”Pebblebrook goes into great detail about why its offer is the better one and includes speculation about what may happen if Blackstone were to increase its offer.

We caution that we are not aware of any listed equity REIT M&A transaction since 2006 in which a target has agreed to a cash offer at a discount of greater than 1% compared to a competing share or share/cash offer. In fact, a survey of trends in public REIT M&A transactions recently published by your legal counsel clearly states that cash transaction prices are generally less attractive than shares or cash/share alternatives. Their research has shown that all-cash buyers typically pay higher premiums than cash/stock buyers in public M&A transactions, not the other way around. Currently, Blackstone's cash offer represents a significant discount to the implied price of our offer, regardless of which time period is considered.

Another REIT Merger

Meanwhile another REIT merger is heading to a conclusion -- Brookfield Property Partners and GGP agreement for Brookfield to acquire the rest of the shares of GGP that it doesn't already own -- and unlike the Pebblebrook-LaSalle-Blackstone battle, this one has proceeded with little controversy since it was first announced.GGP has set the special meeting GGP stockholders for July 26, 2018 to vote on the transaction and has also set the record closing date for the pre-closing dividend.It also just announced that independent proxy advisory firms Institutional Shareholder Services and Glass, Lewis & Co. have both recommended that GGP stockholders vote for the merger proposal.