Host Hotels & Resorts, Inc. Recommends that Holders of Operating Partnership Units of Host Hotels & Resorts, L.P. Reject “...
August 25 2016 - 4:30PM
Host Hotels & Resorts, Inc. (NYSE:HST) (the “Company”) has
learned that certain affiliates of MacKenzie Capital Management, LP
(“Purchaser”) made an unsolicited “mini tender” offer for up to
240,000 operating partnership units (“OP Units”) of Host Hotels
& Resorts, L.P. (“Host L.P.”) at a price of $13.05 per OP Unit
less any cash distributions made by Host L.P. since July 31, 2016
(the “MacKenzie Offer”). This follows an earlier “mini tender”
offer by the Purchaser launched in March 2016. Neither the Company
nor Host L.P. are in any way associated with the MacKenzie Offer,
and holders of OP Units are under no obligation to take any action
with respect to the MacKenzie Offer.
Mini-tender offers seek less than 5 percent of a
company’s outstanding equity. This allows the offering company to
avoid many of the United States Securities and Exchange Commission
(the “SEC”) disclosure and procedural requirements for tender
offers. The SEC’s guidance to investors on “mini tender” offers is
available at www.sec.gov/investor/pubs/minitend.htm. This guidance
advises that mini-tender offers “have been increasingly used to
catch investors off guard” and that investors “may end up selling
their securities at below-market prices.”
After careful evaluation of the MacKenzie Offer,
the Company and Host L.P. recommend that the holders of OP Units
reject this unsolicited offer. In making this recommendation, the
Company primarily considered that the offer price in the MacKenzie
Offer is below the $18.18 per share closing stock price of the
Company’s common stock on August 15, 2016, the date the Company
became aware of the mini-tender. Although there is no trading
market for the OP Units themselves, at any time holders of OP Units
may request that the Company redeem their OP Units and the Company,
in its discretion, may either redeem the OP Units for cash or, in
the alternative, issue 1.021494 shares of the Company’s common
stock in exchange for each OP Unit, which shares may then be
sold. Based on the closing price of the Company’s common
stock on August 24, 2016 of $18.27, an OP unitholder would receive
shares with a market value of approximately $18.66 compared to the
MacKenzie Offer of $13.05.
The Purchaser has made many similar unsolicited
mini-tender offers for equity of other companies and a March 2016
unsolicited mini-tender offer to OP unitholders of Host L.P. at a
similar discount to current market value. Like its other offers,
this offer puts individual investors at risk because they may not
realize they are selling their OP Units at a discount. The Company
urges investors to get current quotes for the Company’s common
stock for which their OP Units may be redeemed, consult their
financial advisors and exercise caution with respect to the
MacKenzie Offer. The Company recommends that OP unitholders who
have not responded to the Purchaser’s offer take no action. The
Company encourages brokers and dealers, as well as other market
participants, to review the SEC’s letter regarding broker-dealer
mini-tender offer dissemination and disclosure at
http://www.sec.gov/divisions/marketreg/minitenders/sia072401.htm.
Holders of OP Units should consult with their
personal financial advisor or other legal, tax or investment
professional(s) regarding any questions they may have.
The Company requests that a copy of this press
release be included with all distributions of materials related to
the MacKenzie Offer.
About Host Hotels &
Resorts
Host Hotels & Resorts, Inc. is an
S&P 500 and Fortune 500 company and is the largest lodging real
estate investment trust and one of the largest owners of luxury and
upper-upscale hotels. The Company currently owns 89 properties
in the United States and 9 properties internationally totaling
approximately 54,500 rooms. The Company also holds non-controlling
interests in six joint ventures, including one in Europe that owns
10 hotels with approximately 3,900 rooms and one in Asia that has
interests in five hotels in India. Guided by a disciplined approach
to capital allocation and aggressive asset management, the Company
partners with premium brands such as Marriott®, Ritz-Carlton®,
Westin®, Sheraton®, W®, St. Regis®, Le Meridien®, The Luxury
Collection®, Hyatt®, Fairmont®, Hilton®, Swissôtel®, ibis®,
Pullman®, and Novotel® as well as independent brands in the
operation of properties in over 50 major markets worldwide. For
additional information, please visit the Company's website at
www.hosthotels.com.
* This press release contains registered
trademarks that are the exclusive property of their respective
owners. None of the owners of these trademarks has any
responsibility or liability for any information contained in this
press release.
Gregory J. Larson
Executive Vice President
240.744.5120
Gee Lingberg
Vice President
240.744.5275
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