Eagle Hospitality shares soar on buyout offer
Shares of Eagle Hospitality Properties Trust Inc. (NYSE: EHP) established a new 52-week-high in heavy trading today after the company this morning announced it will be acquired by AP AIMCAP, a real estate joint venture, for $13.35 per share and units in cash.
Based on 17.75 million outstanding shares, the deal is valued at around $237 million.
Eagle Hospitality is a real estate investment trust (REIT) focused on the full-service and all-suite hotel industry. It is being acquired by a joint venture of Apollo Real Estate Investment Fund V L.P., Aimbridge Hospitality, L.P., and JF Capital Advisors LLC.
The deal, subject to Eagle Hospitality stockholder approval, is slated to close in the 2007 third quarter.
The purchase price represents a premium of approximately 21% over Eagle's three-month average closing share price and a premium of approximately 42% over Eagle's closing stock price of $9.40 on Jan. 29, the day the company announced that a special committee was formed to explore strategic alternatives, according to Eagle Hospitality.
Shares were up $1.33, or 11.2%, to a new 52-week-high of $13.23 by 12:52 ET. Previously, the stock had traded between $8.68 (on Sept. 7, 2006) and $12.78 (on April 10) in the past year. Volume was extremely high – 2.7 million shares compared with an average three-month daily volume of 129,137 shares.
Eagle Hospitality owns 13 full-service and all-suite hotels across the United States including Hilton, Embassy Suites, Marriott and Hyatt.
Lee Neibart, senior partner at Apollo, said in a written statement that the Eagle portfolio “consists of a diversified group of well-branded hotels with strong cash flow.”
In February, Eagle Hospitality had received a proposal from affiliated company Corporex Companies to purchase all outstanding shares of the company.
In 2006, Eagle Hospitality posted net income available to common shareholders of $3.1 million, or 17 cents per share on revenue of $151 million.
