Ashford to Weigh Weisman's Offer

Ashford Hospitality Prime Inc. said it would consider an unsolicited takeover offer of about $735 million from the Weisman Group, two months after an internal review resulted in a decision not to sell the company.

Shares in the luxury hotelier shot up 33% midday to $15.02.

The bid, for $20.25 a Class A share, represents a 79% premium to Ashford's closing price Tuesday. Weisman also offered $25 a share for the company's Class B shares.

In early April, Ashford said it had wrapped up its review of strategic alternatives for the company, with its board ruling out a sale after receiving interest from several buyers. Ashford had said it received indications of interest from potential buyers to acquire the company, but none of the indications was at levels that the independent directors believed would "provide adequate value to stockholders."

With the review complete, Ashford said it would start a sale for up to four of its assets that don't have "product quality consistent with the long-term vision" of the company.

On Wednesday, Ashford said it would "carefully review and evaluate" the proposal from the Sherman Oaks, Calif., investment firm, which holds a 5.2% stake in the company.

Ashford is a real-estate investment trust focused on investing in luxury hotels. Less than two years ago, it was spun off from Ashford Hospitality Trust Inc.

Last month, Ashford capped a bitter fight with a first-time activist investor with a court ruling in its favor. Hedge fund Sessa Capital had nominated directors for a majority of the board. It argued that a termination fee owed to Ashford's external manager, whose chief executive is also Ashford's CEO, was keeping the company from pursuing a sale that might benefit stockholders. Sessa said officials were entrenched and the stock undervalued, but a judge ruled it hadn't followed the rules to run a proxy fight.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

June 08, 2016 13:05 ET (17:05 GMT)

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