(Reuters) - Activist investor Land and Buildings, which owns about 2 percent in U.S. real estate investment trust RLJ Lodging Trust (RLJ.N), urged the REIT to consider selling itself.
RLJ’s management has been disappointing and the company’s performance casts doubt on its ability to unlock shareholder value, Land and Buildings said in a statement on Wednesday.
Jonathan Litt-controlled Land and Buildings is known to aggressively target companies he deems undervalued and in need of leadership or strategy changes.
The hedge fund in July warned Hudson’s Bay Co (HBC.TO) that it would consider a push to remove some directors at the Canadian retailer if the company did not take steps to enhance shareholder value.
Land and Buildings said RLJ should provide a comprehensive plan outlining how the company would achieve a valuation that was better than Blackstone Group LP’s (BX.N) all-cash offer it had earlier rejected.
Blackstone had earlier in the year offered to buy RLJ, which owns hotels that operate under brands such as Hyatt and Hilton, for about $3 billion, according to the Wall Street Journal.
Blackstone’s offer came at a time when RLJ had agreed to buy fellow lodging trust FelCor and a deal with Blackstone would have jeopardized the process.
In a letter to shareholders on Wednesday the activist investor expressed frustration on RLJ’s inability to lay out its strategy for the combined company.
“The RLJ management team has failed to communicate a comprehensive strategy for the combined company, which we believe has left many members of the investment community skeptical of the transaction.”
RLJ’s shares were up 1.2 percent at $20.30 in morning trade. Up to Tuesday’s close RLJ had fallen 15 percent since it announced its acquisition of FelCor on April 24.
Reporting by Nikhil Subba and Diptendu Lahiri in Bengaluru; Editing by Sai Sachin Ravikumar and Shounak Dasgupta