NexPoint to acquire Condor for $318m
 
NexPoint to acquire Condor for $318m
22 JULY 2019 8:28 AM

NexPoint Hospitality Trust has agreed to acquire Condor Hospitality Trust through NexTrust’s NHT Operating Partnership with a combination of cash and debt for a total of $318 million.

TORONTO & BETHESDA, Md.--July 22, 2019--NexPoint Hospitality Trust (TSXV: NHT.U) (“NHT”) and Condor Hospitality Trust, Inc. (NYSE American: CDOR) (“Condor”) today announced the execution of a definitive agreement (the “Merger Agreement”), under which NHT’s operating partnership, NHT Operating Partnership, LLC (“NHT OP”), will acquire all of the outstanding equity interests of Condor and its operating partnership by merger. The total consideration payable pursuant to the transaction is approximately US$318 million, which will be satisfied by a combination of cash and debt, including the assumption of certain debt.

Transaction Highlights

In line with NHT’s growth strategy, NHT will acquire 15 select-service and extended stay hospitality properties, representing 1,908 guestrooms across eight U.S. states (the “Portfolio”).
The transaction will expand NHT’s geographic footprint into Georgia, Kansas, Kentucky, Maryland, Mississippi and South Carolina and increase its presence in Florida and Texas.
Following closing of the transaction, NHT’s gross asset value is expected to increase to approximately US$700 million.

The merger consideration of US$11.10 per share to be paid to holders of shares of common stock represents a premium of approximately 34% over Condor’s unaffected share price of US$8.27 as of July 19, 2019, the most recent trading day before the public announcement of the proposal to acquire Condor.

A presentation further detailing the merits of the proposed transaction can be found under “News & Presentations” in the Investor Relations section of NHT’s website (http://www.nexpointhospitality.com).

“We’re excited about NexPoint Hospitality Trust’s strategic merger with Condor Hospitality Trust. The transaction instantly expands NHT’s geographical footprint and balances NHTs strategic value-add portfolio with durable, core, extended-stay hotels.” stated NHT’s Chief Executive Officer, Jim Dondero. “We believe the future for quality extended-stay and select-service hotels remains bright.”

Bill Blackham, Condor’s Chief Executive Officer, commented: “We are pleased with our strategic alternatives process concluding with a transaction we believe is attractive for our shareholders. NHT is acquiring our very high quality portfolio of outperforming select service hotels and Condor shareholders are receiving a liquidity event at an attractive premium to our unaffected share price prior to the transaction announcement.”

Key Transaction Terms

Completion of the transaction, which is expected to occur in the fourth quarter of 2019, is subject to customary closing conditions, including the approval of Condor’s common and preferred shareholders. There can be no assurances that any such conditions will be satisfied or waived or that the acquisition of the Portfolio will be completed.
NHT OP has entered into voting agreements with certain shareholders of Condor that hold approximately 53% of the outstanding common shares and 100% of the preferred shares of Condor, pursuant to which, such holders have agreed to vote their shares of Condor in favor of the transaction.

The transaction is not contingent on receipt of financing. NHT OP has entered into an equity commitment letter with NexPoint Advisors, L.P. (“NexPoint”), pursuant to which NexPoint has agreed to provide equity financing for the purchase price payable under the Merger Agreement (the “Equity Financing”). In addition to the Equity Financing, NHT will assume approximately US$8.65 million of in-place property level mortgage financing and expects to obtain secured financing to finance a portion of the purchase price and refinance certain debt of Condor.

Upon closing of the transaction, holders of common stock of Condor would receive US$11.10, without interest thereon, per share, holders of 6.25% Series E Preferred Stock of Condor would receive US$10.00 per share and limited partners of Condor’s operating partnership, Condor Hospitality Limited Partnership (“Condor OP”), would receive US$0.21346 per Condor OP partnership interest.

The transaction is an arm’s length transaction and no non-arm’s length party of NHT holds any interest in Condor or its assets.

NHT expects to maintain its current quarterly dividend of US$0.075 per unit or US$0.300 per unit on an annualized basis.

Advisors

KeyBanc Capital Markets, Inc. is acting as financial advisor to Condor. Winston & Strawn LLP and Goodmans LLP are acting as legal counsel to NHT and McGrath North Mullin & Kratz, PC LLO is acting as legal counsel to Condor.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The above is a news release written by a third party. While HNN’s editorial mission is to produce unique content, it occasionally publishes timely, newsworthy news releases to complement in-house reporting efforts. All news releases are clearly marked as such. For questions and clarification, please contact Editorial Director Stephanie Ricca at sricca@hotelnewsnow.com.

No Comments

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.