LaSalle Hotel Properties has announced that its shareholders voted to approve its previously announced merger with Pebblebrook Hotel Trust.
At the special meeting of LaSalle common shareholders, held on November 27, 2018, approximately 99 per cent of the shares voted were cast favour of the merger, representing more than 86 per cent of LaSalle’s total outstanding common shares. Pebblebrook also announced today that its shareholders voted to approve the issuance of Pebblebrook common shares to the holders of LaSalle common shares pursuant to the definitive merger agreement under which Pebblebrook will acquire 100 per cent of LaSalle’s outstanding common shares.
Michael D. Barnello, President and Chief Executive Officer of LaSalle Hotel Properties, said, “We thank the LaSalle shareholders for their support of this combination. We look forward to continuing to work closely with Pebblebrook to quickly bring this transaction to a close.”
Final election and allocation results
Pursuant to the terms of the Merger Agreement and election materials previously mailed to LaSalle shareholders, LaSalle shareholders were permitted to make an election to receive for each LaSalle common share either 0.92 Pebblebrook common shares or an amount in cash equal to $37.80.
The elections are subject to proration and adjustment procedures to ensure that the maximum number of LaSalle common shares eligible to be converted into the right to receive the cash consideration is equal to 30 per cent of the aggregate number of LaSalle common shares issued and outstanding immediately prior to the effective time of the merger.
LaSalle common shares held by Pebblebrook are excluded from the cash election in the merger, effectively increasing the maximum cash shares to approximately 33 per cent of the aggregate number of LaSalle common shares outstanding immediately prior to the effective time of the merger.
The election deadline was 5:00 p.m. ET, November 26, 2018. Through the elections, the holders of 85.8 million LaSalle common shares, or approximately 77 per cent of the LaSalle common shares deemed outstanding for purposes of the election (including the shares held by Pebblebrook and not eligible to receive the cash consideration), elected to receive the cash consideration.
The remaining holders of 25.4 million LaSalle common shares, or approximately 23 per cent of the LaSalle common shares, either elected to receive the share consideration, did not submit valid elections, submitted an election expressing no preference, or represent the approximately 10 million shares held by Pebblebrook that were not eligible to receive the cash consideration.
Based on the final election results and applying the proration provisions set forth in the Merger Agreement, because cash elections were made with respect to more than 30 per cent of the LaSalle common shares outstanding immediately prior to the effective time of the merger, LaSalle common shareholders will receive the following merger consideration:
- LaSalle shareholders that validly elected to receive 100 per cent share consideration, did not make a valid election or expressed no preference, will receive 0.92 Pebblebrook common shares for each LaSalle common share;
- LaSalle shareholders that validly elected to receive 100 per cent cash consideration will receive an amount in cash equal to $37.80 multiplied by the number of such holder’s LaSalle common shares multiplied by the cash consideration percentage of approximately 38.9 per cent, and an amount of Pebblebrook common shares equal to approximately 61.1 per cent of the number of such holder’s LaSalle common shares multiplied by 0.92; and
- LaSalle shareholders that validly elected a combination of cash and share consideration shall be prorated based on the above percentages subject to their individual cash/share elections.
The merger, which is expected to close on November 30, 2018, is subject to the satisfaction of certain remaining customary closing conditions.
Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are acting as financial advisors to LaSalle and Goodwin Procter LLP and DLA Piper LLP (US) are acting as legal counsel.