What happened
Shares of Hersha Hospitality Trust (NYSE:HT) were up 56.2% as of 11:50 a.m. ET Monday, according to data provided by S&P Global Market Intelligence, after the company agreed to go private through a $1.4 billion acquisition by private equity firm KSL Capital Partners.
So what
In a press release this morning, the hospitality-focused real estate investment trust (REIT) announced it has agreed to be acquired by affiliates of KSL Capital for $10 per share -- a roughly 60% premium from Friday's closing price -- in an all-cash transaction valued at about $1.4 billion.
The agreement follows a multiyear strategic review by an independent transaction committee formed by Hersha's board of trustees. Hersha management insists it's "confident this step will allow us to deliver value for our shareholders while refocusing on growing the business over a longer period of time."
Now what
The purchase still needs to receive shareholder approval from a majority of those who own Hersha's outstanding common shares. But assuming all goes as planned, the transaction should close in the fourth quarter of 2023 -- at which time Hersha's common and preferred shares will no longer be publicly listed.
With Hersha shares now trading at only a modest discount to the agreed acquisition price -- and unless waiting a few more months might push someone over the one-year ownership threshold to pay long-term capital gains taxes on their profits -- I wouldn't blame Hersha investors for selling now and putting their gains to work in another promising stock.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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