CHICAGO—Strategic Hotels & Resorts, Inc. has announced that it has entered into a definitive agreement with affiliates of Blackstone Real Estate Partners VIII L.P., under which Blackstone will acquire all outstanding shares of common stock of Strategic Hotels & Resorts, Inc., for $14.25 per share in cash, and all of the outstanding membership units of the Company’s subsidiary, Strategic Hotels Funding L.L.C., not held by the company, for $14.25 per unit in cash. Including outstanding debt of the company, the total transaction value is approximately $6 billion.
“Our board and management team have consistently stated that we would consider any opportunity that maximizes stockholder value,” said Raymond L. “Rip” Gellein, chairman and chief executive officer of Strategic Hotels & Resorts, Inc. “We believe this transaction capitalizes on our unique portfolio, strong asset management platform and continued operating outperformance over the past several years. The board thoroughly considered various alternatives over the course of the past few years, and this all cash offer from Blackstone creates significant stockholder value with a high degree of execution certainty,” concluded Gellein.
Tyler Henritze, co-head of US acquisitions for Blackstone Real Estate, added, “We are excited about the opportunity to acquire one of the highest quality luxury hotel portfolios in the U.S. As long term investors in the lodging industry, we remain confident in the fundamentals of the sector despite recent market volatility.”
The offer price represents a premium of approximately 13 percent over the unaffected intra-day trading price on July 23, 2015.
Completion of the transaction is expected to occur by the first quarter of 2016, and is contingent upon customary closing conditions, including the approval of Strategic Hotel’s stockholders, who will vote on the transaction at a special meeting on a date to be announced. Furthermore, the transaction is not subject to a financing contingency. The Board of Directors of Strategic Hotels has unanimously approved the merger agreement.
