(Reuters) - The board of U.S. hotel owner LaSalle Hotel Properties (LHO.N) on Wednesday sided with Pebblebrook Hotel Trust’s (PEB.N) takeover proposal, ditching a $4.8 billion all-cash offer from private equity firm Blackstone Group LP (BX.N).
LaSalle said its board determined that Pebblebrook’s unsolicited proposal received on Aug. 21 constituted a “superior proposal”, ahead of a shareholder vote on the deal on Thursday.
Pebblebrook has offered 0.92 of its common shares per LaSalle stock, with an option to receive $37.80 per share in cash up to a maximum of 30 percent in aggregate of the consideration.
LaSalle, which owns Park Central San Francisco and Westin Michigan Avenue, also said it had sent a notice to Blackstone Group LP (BX.N) to terminate its previous merger agreement, under which the private equity firm had agreed to acquire LaSalle for $33.50 per share.
A person familiar with the deal told Reuters last month that Blackstone had decided against raising its offer. If LaSalle reaches an agreement with Pebblebrook, Blackstone will walk away with a $112 million breakup fee.
Last month, shareholder advisory firms Glass Lewis & Co and ISS recommended that LaSalle shareholders oppose the Blackstone deal.
LaSalle shares rose 1.3 percent to $35.50 in aftermarket trade, while those of Pebblebrook were up 1 percent at $38.49.
Reporting by Sanjana Shivdas in Bengaluru; Editing by Anil D'Silva