Feb 27 (Reuters) - Lodging REIT Ashford Hospitality Trust Inc’s offer to buy FelCor Lodging Trust Inc was “woefully inadequate”, activist hedge fund Land and Buildings Investment Management LLC, which holds a stake in FelCor, said on Monday.
Ashford offered to buy FelCor last week, in a deal valued at about $1.27 billion, and launched a proxy battle for the control of the company’s board.
Land and Buildings, which owns 6.1 percent of FelCor’s shares, estimated the company’s net asset value at $10.50 per share, well above Ashford’s offer price of $9.27 per share in stock and warrants.
The hedge fund also said any offer by Ashford should consist of at least $5 per share in cash, which is roughly the cash balances at Ashford and its external manager Ashford Inc .
FelCor’s shares were up 1.8 percent at $7.21. Ashford’s shares, on which FBR raised its rating to “outperform” from “market perform”, jumped 4.7 percent to $6.71.
Up to Friday’s close, Felcor’s shares had fallen about 2 percent, since Feb. 17, the last trading day before Ashford made its offer. Ashford’s shares have dropped about 16 percent in that period. (Reporting by Ankit Ajmera in Bengaluru; Editing by Savio D’Souza)