Blackstone Bags LaSalle for US$4.8bn

Date: May 2018

Location: 41 hotels across USA

Name: LaSalle Hotel Properties, hotels such as Embassy Suites Phildephia, Grafton on Sunset, LAX, Hilton San Diego, Hotel Palomar Washington, Hyatt Boston Harbour, Park Central NY, Sofitel Washington DC and The Marker SFX.

The Marker Waterfront Resort in Key West, FL

No. of Keys: 10,400

Seller: LaSalle had discussions with 20 potential buyers, and signed confidentiality agreements with 10. Pebblebrook Hotel Trust, who were a close second to Blackstone as buyer, had already raised its offer, after an earlier bid was rejected.

Michael D. Barnello was named Chief Executive Officer of LaSalle in September 2009.

Mr. Barnello served as Chief Operating Officer and Executive Vice President of Acquisitions of the Company from its formation until September 2009. In May 2008, he was named President of LaSalle Hotel Properties and was elected to the Board of Trustees in July 2008.

Mr. Barnello joined Jones Lang LaSalle in April 1995 as a Vice President. Prior to April 1995, Mr. Barnello was a Vice President with Strategic Reality Advisors, formerly known as VMS Realty Partners, where he was responsible for hotel asset management since 1990.

Concurrently, Mr. Barnello was a Vice President at Stone-Levy LLC, an affiliate of Strategic Realty Advisers, where he was responsible for hotel acquisitions. Mr. Barnello holds a B.S. in Hotel Administration from Cornell University’s School of Hotel Administration.

Goodwin Procter LLP and DLA Piper LLP (US) were the legal advisers to LaSalle.

Buyer: Blackstone, whose offer values LaSalle at $33.50 per share and represents a premium of 5 percent to LaSalle’s closing price on Friday.

“Blackstone offer provides immediate and certain cash value,” Baird Equity Research analyst Michael Bellisario wrote in a note.

Blackstone usually buys hotels and other real estate holdings at a discount, restructures them and sells for a profit.

Citigroup Global Markets Inc and Goldman Sachs & Co LLC were the financial advisers. Morgan Stanley & Co. LLC and J.P. Morgan were the financial advisers to Blackstone. Simpson Thacher & Bartlett LLP was acting as legal adviser to Blackstone.

Price: $4.8bn

Price per Key: US$461,538

THPT Comment: Blackstone exited Hilton Worldwide Holdings Inc (HLT.N) on Friday after nearly 11 years by selling about 5.8 percent stake or 15.8 million shares in the hotel chain operator for about $1.32 billion. LaSalle, at just under half a million dollars a room, it wasn’t cheap!

First Seen: Reuters