As previously disclosed, the Company has entered into the merger agreement by and among the
Company, the Operating Partnership and the Parent Parties. Pursuant to the merger agreement, Parent will acquire the Company through (1) a merger of Merger Sub with and into the Company, with the Company surviving the merger (the Company
merger), and (2) a merger of Merger OP with and into the Operating Partnership, with Merger OP surviving the merger (the Partnership merger, and with the Company merger, the mergers). The obligations of the Company
and Parent to complete the mergers are subject to the satisfaction or waiver of certain customary conditions (including the applicable approvals of the Companys shareholders), which are set forth in the merger agreement.
The Company has previously disclosed in the Definitive Proxy Statement that putative class action lawsuits were filed on August 20, 2019
and August 23, 2019 relating to the merger agreement and discloses below that a third putative class action was filed on August 26, 2019 (collectively, the Merger Litigation).
While the Company believes that no supplemental disclosure is required to be made to the Definitive Proxy Statement under applicable law and
that the claims asserted in the Merger Litigation are without merit, in order to avoid the risk of the Merger Litigation delaying or adversely affecting the Company merger and to minimize the costs, risks and uncertainties inherent in litigation,
and without admitting any liability or wrongdoing, the Company has determined to voluntarily supplement the Definitive Proxy Statement as provided below. The named plaintiffs in the Merger Litigation (Plaintiffs) have agreed to request
voluntary discontinuance of the Merger Litigation with prejudice as to Plaintiffs only, and without prejudice as to the putative class, within three business days of the closing of the transactions contemplated by the merger agreement.
Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or
materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the Merger Litigation that any additional disclosure was or is required.
This Current Report on Form 8-K and the disclosure provided herein does not affect the consideration
to be paid to shareholders of the Company in connection with the Company merger or the timing of the special meeting of the Companys shareholders scheduled for September 23, 2019 at 10:00 a.m. Eastern time as described in the Definitive
Proxy Statement. The Companys board of directors continues to recommend that Company shareholders vote FOR the proposal to approve the Merger Agreement and FOR the other proposals being considered at the special
meeting.
The following underlined language is added to the fourth full paragraph on page 27 of the Definitive Proxy Statement concerning the
Background of The Mergers.
KeyBanc was formally engaged as the board of directors financial advisor as of September 13,
2018. Over the ensuing weeks, KeyBanc, at the direction of the board of directors, reached out to over 200 potential bidders to gauge interest in a strategic transaction with the Company. The types of parties contacted included private equity
investors, strategic investors, sovereign wealth funds, insurance companies, family offices, hedge funds and pension fund / endowments and public REITs. Between October 1, 2018 and October 25, 2018, the Company entered into 45 non-disclosure agreements with potential parties identified by KeyBanc, including NexPoint Real Estate Advisors L.P. (NREA), an affiliate of Highland Capital Management L.P. (Highland
Capital), a multibillion-dollar global alternative investment manager founded in 1993. Forty of the non-disclosure agreements contain a provision restricting the counterparty from requesting that the
Company waive the agreed-upon standstill. The remaining five non-disclosure agreements did not contain such a provision. In five of the
non-disclosure agreements including two of the forty containing provisions prohibiting a standstill waiver request the standstill obligation terminated upon the Parties execution of the
merger agreement. The parties entering into non-disclosure agreements, including NREA, were provided access by KeyBanc, at the direction of the Company, to a virtual data room which contained a
confidential information memorandum, Company financial information and Smith Travel Research (STR) reports on the Companys hotels.
The following sentence is added after the fifth sentence of the first full paragraph on page 37 of the Definitive Proxy Statement under the heading
THE MERGERSOpinion of our financial advisor.
KeyBanc did not perform a discounted cash flow analysis or net present value analysis of the
Company.
The first two sentences of the first paragraph on page 41 of the Definitive Proxy Statement under the heading THE MERGERSSummary
of financial analyses of our financial advisorPremiums Paid Analysis are hereby revised, supplemented and replaced in their entirety as follows.
For each of the target companies involved in the reviewed transactions, KeyBanc examined the closing stock price one trading day, one week (five trading days)
and four weeks (20 trading days) prior to the public announcement of the transaction in order to