DALLAS, Feb. 28, 2017 /PRNewswire/ -- Ashford
Hospitality Trust, Inc. (NYSE: AHT) ("Ashford Trust") today sent
the following letter to Steven R.
Goldman, Chief Executive Officer of FelCor Lodging Trust
Incorporated (NYSE: FCH) ("FelCor"), in response to FelCor's letter
dated February 27, 2017 regarding a
potential business combination.
February 28, 2017
FelCor Lodging Trust Incorporated
125 E. John Carpenter Freeway, Suite 1600
Irving, Texas 75062
Attention: Steven R. Goldman,
CEO
Dear Steve:
Thank you for your letter dated February
27, 2017. We are encouraged by FelCor's offer to
engage with Ashford Trust and welcome the opportunity to work
together towards a mutually beneficial business combination.
We are confident this transaction is in the best interest of our
respective shareholders, and we firmly believe our proposal offers
you the most compelling value enhancing alternative relative to
other possible strategies.
In our prior discussions, FelCor's Board of Directors gave us
clear direction to make our proposal to you in the form of an all
stock transaction. In several of our communications, we have
provided detail clarifying the potential impediments to a cash bid.
As the FelCor Board knows, FelCor's outstanding bonds contain
restrictive covenants that limit the amount of debt that FelCor may
incur and the amount of cash that may be distributed to FelCor
shareholders. In addition, the bonds contain a significant
make whole payment, which Ashford Trust estimates to be
approximately $110 million, or
$0.80 per share, that is payable upon
any redemption of the bonds. These restrictions effectively limit
the availability of cash for a purchaser of FelCor.
As a result, we believe our current proposal consisting of all
stock consideration is one that your Board should continue to
prefer, as we were previously told. Compared to a cash
transaction, our proposal provides an immediate and significant
premium return to your stockholders along with the added potential
economic benefits of greater value from operational and G&A
savings and the significantly increased size of the combined
REIT. A cash bid simply does not offer the future growth
potential for your shareholders, which is what we believe is so
attractive about this transaction. While it is easy to
recognize the merits of an all stock transaction, we nevertheless
are prepared to begin working with you immediately to determine if
there is any more favorable consideration mix, including a cash
component. Our goal is maximizing shareholder value today and
for the future, while also best positioning the combined company's
balance sheet for success.
We are fully prepared to refresh our data room to provide you
access to customary due diligence information and to commence our
confirmatory diligence review of FelCor. We are convinced
that a full and complete review of each our companies will lead to
a clear understanding of the obvious efficiencies and value added
opportunities of our proposed combination. We support having
our respective financial and legal advisors connect directly so
that both our teams can commence working on reciprocal due
diligence and assist with transaction negotiations.
Let's create a better economic future for both groups of
shareholders – namely, combining to establish a preeminent lodging
REIT with strategic, financial and operational upside.
Our entire Ashford team looks forward engaging with FelCor to
maximize shareholder value and continue our strong track record of
delivering strong total shareholder returns.
Very truly yours,
Douglas A. Kessler
Chief Executive Officer
Ashford Hospitality Trust, Inc.
Ashford Hospitality Trust is a real estate investment trust
(REIT) focused on investing opportunistically in the hospitality
industry in upper upscale, full-service hotels.
Ashford has created an Ashford App for the hospitality REIT
investor community. The Ashford App is available for free
download at Apple's App Store and
the Google Play Store by searching "Ashford."
Contacts
Ashford Hospitality
Trust
|
Media
|
MacKenzie Partners,
Inc.
|
Deric
Eubanks
|
Lex
Suvanto
|
Paul Schulman/Bob
Marese
|
Chief Financial
Officer
|
(212)
729-2463
|
(212)
929-5500
|
(972)
490-9600
|
Lex.suvanto@edelman.com
|
(800) 322
-2885
|
|
|
|
Jordan
Jennings
|
Kara
Brickman
|
|
Investor
Relations
|
(212)
729-2443
|
|
(972)
778-9487
|
Kara.brickman@edelman.com
|
|
Forward Looking Statements
Certain statements and assumptions in this press release
contain or are based upon "forward-looking" information and are
being made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and
uncertainties. When we use the words "will likely result,"
"may," "anticipate," "estimate," "should," "expect," "believe,"
"intend," or similar expressions, we intend to identify
forward-looking statements. Such statements are subject to
numerous assumptions and uncertainties, many of which are outside
Ashford Trust's control.
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation: general volatility of the capital markets and the
market price of our common stock; changes in our business or
investment strategy; availability, terms and deployment of capital;
availability of qualified personnel; changes in our industry and
the market in which we operate, interest rates or the general
economy; the degree and nature of our competition; risks that
Ashford Trust will ultimately not pursue a transaction with FelCor
or FelCor will reject engaging in any transaction with Ashford
Trust; if a transaction is negotiated between Ashford Trust and
FelCor, risks related to Ashford Trust's ability to complete the
acquisition on the proposed terms; the possibility that competing
offers will be made; risks associated with business combination
transactions, such as the risk that the businesses will not be
integrated successfully, that such integration may be more
difficult, time-consuming or costly than expected or that the
expected benefits of the acquisition will not be realized; risks
related to future opportunities and plans for the combined company,
including uncertainty of the expected financial performance and
results of the combined company following completion of the
proposed acquisition; disruption from the proposed acquisition,
making it more difficult to conduct business as usual or maintain
relationships with customers, employees, managers or franchisors;
and the possibility that if the combined company does not achieve
the perceived benefits of the proposed acquisition as rapidly or to
the extent anticipated by financial analysts or investors, the
market price of Ashford Trust's shares could decline. These
and other risk factors are more fully discussed in Ashford Trust's
filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. Investors
should not place undue reliance on these forward-looking
statements. We are not obligated to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or circumstances, changes in
expectations or otherwise.
Additional Information
This communication does not constitute an offer to buy or
solicitation of any offer to sell securities. This communication
relates to a proposal which Ashford Trust has made for a business
combination transaction with FelCor. In furtherance of this
proposal and subject to future developments, Ashford Trust (and, if
a negotiated transaction is agreed, FelCor) may file one or more
registration statements, prospectuses, proxy statements or other
documents with the SEC. This communication is not a substitute for
any registration statement, prospectus, proxy statement or other
document Ashford Trust or FelCor may file with the SEC in
connection with the proposed transaction. INVESTORS AND SECURITY
HOLDERS OF ASHFORD TRUST AND FELCOR ARE URGED TO READ CAREFULLY THE
REGISTRATION STATEMENT(S), PROSPECTUS(ES), PROXY STATEMENT(S) AND
OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC IF AND WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT ASHFORD TRUST, FELCOR AND THE PROPOSED TRANSACTION. Investors
and security holders may obtain free copies of these documents (if
and when they become available) and other related documents filed
with the SEC at the SEC's web site at www.sec.gov or by directing a
request to Ashford Trust's Investor Relations department at Ashford
Hospitality Trust, Inc., Attention: Investor Relations, 14185
Dallas Parkway, Suite 1100, Dallas,
Texas 75254 or by calling Ashford Trust's Investor Relations
department at (972) 490-9600. Investors and security holders may
obtain free copies of the documents filed with the SEC on Ashford
Trust's website at www.ahtreit.com under the "Investor" link, at
the "SEC Filings" tab.
Certain Information Regarding Participants
Ashford Trust and Ashford Inc. and their respective directors
and executive officers may be deemed participants in the
solicitation of proxies in connection with the proposed
transaction. You can find information about Ashford Trust's
directors and executive officers in Ashford Trust's definitive
proxy statement for its most recent annual meeting filed with the
SEC on April 25, 2016. You can find
information about Ashford Inc.'s directors and executive officers
in Ashford Inc.'s definitive proxy statements for its most recent
annual meeting and special meeting filed with the SEC on
April 28, 2016 and October 7, 2016, respectively. You can find
information about FelCor's directors and executive officers in
FelCor's definitive proxy statement for its most recent annual
meeting filed with the SEC on April 14,
2016. These documents are available free of charge at the
SEC's web site at www.sec.gov and (with respect to documents and
information relating to Ashford Trust) from Investor Relations at
Ashford Trust, as described above. Additional information
regarding the interests of such potential participants will be
included in one or more registration statements, proxy statements,
tender offer statements or other related documents filed with the
SEC if and when they become available.
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SOURCE Ashford Hospitality Trust, Inc.