Supertel Hospitality, Inc. (NASDAQ: SPPR), a real estate investment
trust (REIT) which owns 101 hotels in 23 states, today announced
that it has entered into a purchase agreement for the issuance and
sale of convertible preferred stock to Real Estate Strategies L.P.
("the Investor"), an investment vehicle indirectly controlled by
IRSA Inversiones y Representaciones Sociedad Anónima ("IRSA"), an
Argentina-based company. Subject to the approval of the
shareholders of Supertel and IRSA's satisfaction with certain debt
refinancing of Supertel, Supertel will issue and sell two million
shares of a newly-created series of preferred stock for $20 million
to the Investor. The Investor will also have the option, to be
exercised prior to closing, to purchase up to an additional one
million of preferred shares for $10 per share.
Supertel President and CEO Kelly Walters welcomed the investment
of IRSA into Supertel, "for IRSA has shown an important growth in
the last 2 decades and is worldwide recognized for its vision to
find companies with high growth potential". Eduardo S. Elsztain,
Chairman of IRSA, commented: "our investment is a vote of
confidence in the direction that Supertel has been pursuing in
terms of repositioning its portfolio, improving property level
management, and strengthening the company's balance sheet. We
expect that with this investment, Supertel will have made
significant progress in its ongoing effort to optimize its capital
structure to ultimately resume growth and regain the financial
flexibility needed to reach its full potential".
Each preferred share will receive a dividend of $0.625 per year,
vote with the common stock, subject to certain voting limitations,
and, subject to ownership limitations, will be convertible into
common stock of Supertel at the rate of ten shares for each share
of preferred stock for a period of 5 years.
In connection with the investment, the Investor will also
receive warrants to purchase 20 million shares of Supertel common
stock, which may be increased up to 30 million shares pro rata with
the Investor's exercise of the option for additional preferred
shares. Subject to ownership limitations, the warrants are
exercisable at any time following the closing date and expire in
five years, at an exercise price of $1.20 per share.
The Investor's and its affiliates' beneficial ownership of
voting stock at any time will be limited to 34% of the issued and
outstanding voting stock of Supertel notwithstanding preferred
voting or conversion rights or warrant exercise rights. The Company
plans to hold a special shareholders meeting and seek shareholder
approval of the proposed transaction pursuant to Nasdaq Stock
Market rules.
Pursuant to a director's designation agreement to be entered
into at the closing of the transaction, Supertel will appoint up to
four directors designated by the Investor to the nine member
Supertel board. The Investor will also have participation or
preemptive rights in future Supertel offerings for up to six years
after closing of the transaction based on its level of beneficial
ownership of Supertel stock.
IRSA's representation on the Supertel board is expected to be
led by Daniel Elsztain, IRSA executive in charge of IRSA's
investment efforts in the United States and also a Board Member in
Hersha Hospitality Trust (NYSE: HT). Daniel Elsztain commented, "I
look forward to assisting Supertel management in building the
company into a growing hospitality firm with a strong balance sheet
in the upcoming years. The people that IRSA will bring to the
Supertel board will seek to complement and add value to help
Supertel management in this mission." The transaction is
anticipated to close within 90 days, subject to the approval of the
Supertel shareholders and refinancing commitments for material debt
of Supertel maturing before the closing. Supertel will file a Form
8-K with the Securities and Exchange Commission containing a
description of the transaction, along with a copy of the purchase
agreement.
JMP Securities is serving as financial advisor to Supertel.
About IRSA Inversiones y
Representaciones Sociedad Anónima
IRSA Inversiones y Representaciones S.A. (NYSE: IRS) (BCBA:
IRSA) is Argentina's largest, most well-diversified real estate
company, and it is the only company in the industry whose shares
are listed on both the Bolsa de Comercio de Buenos Aires and The
New York Stock Exchange. Through its subsidiaries, IRSA manages an
expanding top portfolio of shopping centers and office buildings,
primarily in Buenos Aires. The company also develops residential
projects and owns three luxury hotels. Its solid, diversified
portfolio of properties has established the Company as the leader
in the sector in which it participates, making it the best vehicle
to access the Argentine real estate market. Additionally, IRSA owns
a stake in Banco Hipotecario, Argentina's largest mortgage supplier
in the country. In the US, IRSA owns a 9% equity stake in Hersha
Hospitality Trust and commercial real estate property in NYC,
including ownership and management of the Lipstick building at 885
Third Avenue and ownership of the building at 183 Madison
Avenue.
About Supertel Hospitality, Inc. As of
November 16, 2011, Supertel Hospitality, Inc. (NASDAQ: SPPR) owns
101 hotels comprised of 8,856 rooms in 23 states. The company's
hotel portfolio includes Baymont Inn, Comfort Inn/Comfort Suites,
Days Inn, Guest House Inn, Hampton Inn, Holiday Inn Express, Key
West Inns, Masters Inn, Quality Inn, Ramada Limited, Savannah
Suites, Sleep Inn, Super 8 and Supertel Inn. This diversity enables
the company to participate in the best practices of each of these
respected hospitality partners. The company specializes in limited
service hotels, which do not normally offer food and beverage
service. For more information or to make a hotel reservation, visit
www.supertelinc.com.
Forward-Looking Information
Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities
Litigation Reform Act of 1995, and, as such, may involve known and
unknown risks, uncertainties and other factors that may cause the
actual results or performance to differ from those projected in the
forward-looking statement. These risks are discussed in the
Company's filings with the Securities and Exchange Commission.
Additional Information and Where to Find
It Supertel plans to file with the Securities and Exchange
Commission (the "SEC") and mail to its shareholders a proxy
statement in connection with the proposed investment transaction
(the "Transaction"). The proxy statement will contain important
information about the proposed Transaction and related matters.
INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT
CAREFULLY WHEN IT BECOMES AVAILABLE. Investors and shareholders
will be able to obtain free copies of the proxy statement and other
documents filed with the SEC by Supertel through the web site
maintained by the SEC at www.sec.gov. In addition, investors and
shareholders will be able to obtain free copies of the proxy
statement from Supertel by contacting Investor Relations by
telephone at (402) 371-2520, or by mail at Supertel, Investor
Relations, 309 North 5th Street, Norfolk, Nebraska 68701.
Supertel and its directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
shareholders of Supertel in connection with the proposed
Transaction. Information regarding the interests of these directors
and executive officers in the Transaction described herein will be
included in the proxy statement described above. Additional
information regarding these directors and executive officers is
also included in Supertel's proxy statement for its 2011 Annual
Meeting of Shareholders, which was filed with the SEC on April 21,
2011, and Form 10-K for the fiscal year ended December 31, 2010,
filed with the SEC on March 16, 2011. These documents are available
free of charge at the SEC's web site at www.sec.gov, and from
Supertel by contacting Investor Relations by telephone at (402)
371-2520, or by mail at Supertel, Investor Relations, 309 North 5th
Street, Norfolk, Nebraska 68701, or by going to Supertel's Investor
Relations page and choosing the Investor Information link, on the
Supertel corporate web site at www.supertelinc.com.
Supertel Hospitality, Inc. 309 N 5th St. Norfolk, NE
68701 402.371.2520 www.supertelinc.com Contact: Ms. Krista
Arkfeld Director of Corporate Communications
karkfeld@supertelinc.com
Hersha Hospitality (NYSE:HT)
Historical Stock Chart
From May 2024 to Jun 2024
Hersha Hospitality (NYSE:HT)
Historical Stock Chart
From Jun 2023 to Jun 2024