News

Hersha Hospitality Trust Acquired by KSL Capital Partners in $1.4B Cash Deal

1 2 3 4 5

4.4

Andrew R. Michaud

• August 28, 2023

Shares of Hersha Hospitality Trust (HT) experienced a remarkable surge of 56.7% towards an eight-month high in premarket trading on Monday. This surge follows the announcement of an acquisition agreement between Hersha and private equity firm KSL Capital Partners LLC. The deal, valued at $1.4 billion in cash, underscores KSL's confidence in the potential of the hospitality sector.

Agreement Details

According to the terms of the agreement, KSL will pay $10 in cash for each outstanding share of Hersha, representing an impressive 59.2% premium compared to Friday's closing price of $6.28 per share. The acquisition is scheduled to be finalized in the fourth quarter of 2023.

Positive Outlook and Value Creation

Hersha Executive Chairman Jay Shah expressed enthusiasm about the transaction, stating, "This transaction provides our shareholders with immediate and certain value at a substantial premium to our public valuation." He further emphasized that after an in-depth review by the independent Transaction Committee of Hersha's Board of Trustees, both the board and management team are confident that this strategic move will allow them to generate long-term value for shareholders.

Growth Opportunities Ahead

Despite a year-to-date drop of 26.3% in Hersha's stock value, this acquisition represents a turning point for the company. By joining forces with KSL Capital Partners, Hersha can refocus on growing its business over an extended period of time. This renewed focus sets a strong foundation for future success and aligns with their commitment to delivering value to shareholders.

In comparison, the S&P 500 index had gained 14.85% during the same timeframe, indicating Hersha's potential for growth in the favorable hospitality industry.