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BRE Select Hotels holders offered cash for 7% preferreds by MacKenzie
By Angela McDaniels
Tacoma, Wash., March 11 – MacKenzie Capital Management, LP is holding an unsolicited tender offer for up to 1 million shares of BRE Select Hotels Corp.’s 7% series A cumulative redeemable preferred stock, according to a news release from BRE.
Holders are being offered $1.45 per preferred less any cash distributions made by the company after March 1.
BRE expects to declare a cash dividend of $0.0333 per share, payable on April 15 to holders of record on April 1, so the adjusted price is $1.4167 per preferred. This is a roughly 25% discount to the initial liquidation preference of $1.90 per preferred.
In September 2013, BRE’s stockholder, BRE Select Hotels Holdings LP, purchased about 2 million preferreds for $1.30 each as part of a tender offer made in response to a prior tender offer by MacKenzie. BRE said that BRE Holdings does not plan to provide holders with an offer in response to the latest MacKenzie offer.
Neither BRE nor its board of directors made a recommendation as to whether the holders should tender their preferreds or not, but BRE noted that the offer is limited to 1 million preferreds, or 1.4% of the 72,382,848 outstanding preferreds, and MacKenzie is offering to purchase them on a first-come, first-buy basis.
“The MacKenzie offer therefore coerces holders of preferred shares to tender their shares to MacKenzie as soon as possible, which could deprive them of adequate time to evaluate the MacKenzie offer,” the company said. “The coercive nature of the MacKenzie offer is exacerbated by the fact that holders of preferred shares will not have withdrawal rights.”
BRE Select Hotels is a New York real estate investment trust focused on the ownership of upscale, extended-stay and select-service hotels.
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