RLJ Lodging (RLJ) Closes Merger With FelCor Lodging Trust
Zacks Investment Research | Sep 05, 2017 02:29AM ET
RLJ Lodging Trust (NYSE:RLJ) announced the closure of its previously announced merger with FelCor Lodging Trust Incorporated, making it the third largest lodging REIT by enterprise value.
Shares of FelCor will no longer trade on the stock exchange. In fact, the combined entity will operate under the name of RLJ Lodging Trust and trade under the same ticker symbol, RLJ, on the NYSE.
Each common stock of FelCor has been exchanged for 0.362 newly issued shares of RLJ. Further, its operating units have been exchanged for limited partnership units of RLJ’s operating partnership at the same exchange rate. Moreover, each $1.95 Series A cumulative convertible preferred share of FelCor has been exchanged for RJL’s Series A cumulative convertible preferred share. The newly created Series A preferred shares will trade on the NYSE as RLJprA.
The above discussed merger has helped the company fortify its position in the focused-service and compact full-service hotel space. In fact, the combined entity has ownership interest in 160 hotels, including premium branded hotels in 26 states, which are concentrated primarily in the urban and coastal markets.
Per RLJ’s prior announcement, this strategic merger will enable the pure-play lodging REIT to expand global footprint and enhance its portfolio in high-growth markets. In addition, widening the scale of operations will offer a number of benefits to the company, such as better cost control and access to capital markets at favorable terms.
The combined portfolio positions the company well to ride on the growth trajectory and create value for shareholders.
However, RLJ’s shares have underperformed its Zacks Investment Research
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