August 27, 2018 / 11:21 AM / in 3 months

LaSalle says latest Pebblebrook bid may top Blackstone's offer

FILE PHOTO -- The ticker and trading information for Blackstone Group is displayed at the post where it is traded on the floor of the New York Stock Exchange (NYSE) April 4, 2016. REUTERS/Brendan McDermid/File Photo

(Reuters) - U.S. hotel owner LaSalle Hotel Properties (LHO.N) said on Monday Pebblebrook Hotel Trust’s (PEB.N) unsolicited bid last week may be bigger than an offer from private equity firm Blackstone Group LP (BX.N) in May.

Pebblebrook raised the cash component of its $37.80-per-share offer to a maximum of 30 percent of LaSalle’s outstanding shares from 20 percent.

“The board...has determined that the unsolicited, non-binding proposal received from Pebblebrook on Aug. 21, 2018 could reasonably be expected to lead to a superior proposal,” LaSalle said in a statement.

Meanwhile, private equity firm Blackstone, which had made an all-cash offer of $33.50 per share, has decided against raising its offer, a person familiar with the deal said. If LaSalle reaches an agreement with Pebblebrook, Blackstone will walk away with a $112 million breakup fee.

However, LaSalle said its board has not changed its recommendation in support of the Blackstone deal. The shareholders are set to vote on the deal on Sept. 6.

Last week, shareholder advisory firms Glass Lewis & Co and ISS recommended against a buyout deal by Blackstone, while LaSalle shareholder HG Vora Capital Management Llc said it intended to vote against the deal.

LaSalle had rejected Pebblebrook’s previous bids, saying the stock-and-cash mix in its offer was riskier for shareholders than the outright cash deal offered by Blackstone.

Shares of Pebblebrook fell 4 percent, while those of LaSalle fell 2 percent in morning trade.

Reporting by Arunima Banerjee and Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur

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