This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Chatham Rejects BlueMountain Bid as 'Inadequate'

NEW YORK ( TheStreet) -- Hotel REIT Chatham Lodging Trust (CLDT - Get Report) on Wednesday rejected an unsolicited $565 million offer from BlueMountain Capital Management, concluding that the bid was "inadequate, opportunistically timed and contrary to the best interests" of its shareholders.

BlueMountain on Nov. 4 offered $21.50 per share for Chatham, a premium of 15% over the REIT's prior close, and pushed the company to try to find a higher offer. Shares of Palm Beach, Florida-based Chatham were falling 1.7% to $20.64 in mid-day trading.

Chatham argued that the company has posted a total shareholder return of 97% over the past two years and is poised for further growth.

"We thoroughly considered BlueMountain's proposal with our financial and legal advisors prior to rejecting it," Chatham lead independent trustee Miles Berger said in a statement. "Our board has significant hotel, real estate and financial experience, and we have complete confidence in Chatham's strategic plan and our management team's ability to successfully execute that plan."

Chatham chairman and CEO Jeffrey H. Fisher said the REIT met with BlueMountain and insisted that while the board is open to alternatives, "we are confident that now is not the right time to sell the company." The REIT also said it had temporarily revamped its board structure under which directors will be designated into three classes with three-year terms, a move Chatham said "is solely intended to protect value."

But Chatham, which owns interest in 76 hotels totaling 10,526 rooms, has been under pressure from a number of shareholders of late. In July, HG Vora Capital Management, owner of 9.8% at the time, switched from a passive to active holder and began aggregating for change at the company.

HG Vora sold half of its stake to BlueMountain last month.

A third investor, 6.7% holder V3 Capital Management LP, has also urged the REIT to pursue a sale. During Chatham's third quarter conference call last week V3 Capital's Charles Fitzgerald told management that "public markets have not been willing to pay fair value for your assets," adding that "we believe that running a full sales process now and maximizing value while investor interest is high is the best course for the company and shareholders."

Fitzgerald, however, did not back the offer on the table for Chatham, saying "we don't think BlueMountain's current bid reflects fair value either."

BarclaysandWachtell, Lipton, Rosen & KatzandVenable LLPare advising Chatham.



Read more:http://pipeline.thedeal.com/tdd/ViewArticle.dl?id=10005908449#ixzz2kXsYfkGG

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CLDT $28.08 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs