Highland Shareholders Approve $2B Sale to JER

McLEAN, VA-Highland Hospitality Corp.’s shareholders have approved a previously announced agreement to be acquired by affiliates of JER Partners Acquisitions for $2 billion in cash. Highland is a lodging REIT based here that focuses on the premium and upscale full-service and limited-service markets.

According to the agreement originally outlined by the companies, JER would assume Highland’s approximately $260-million existing debt and acquire all of its outstanding common stock and operating partnership units for $19.50 per share–a 15% premium over Highland’s three-month average closing share price. No future dividends will be paid on the common stock.

With the deal on track to close, JER is anticipating adding 27 hotel properties under the Crestline Hotels and Resorts, Marriott International, Hilton Hotels, Hyatt Hotels, Ritz-Carlton and McKibbon Hotel Management under Marriott, Hilton, Ritz-Carlton, Westin, Hyatt, Sheraton, Renaissance, Crowne Plaza, Courtyard, Hilton Garden Inn, Wyndham and Residence Inn flags. All together the portfolio consists of an aggregate of 8,382 rooms in 14 states and the District of Columbia.

Cia Buckley, president of JER’s US Fund Business, has said that JER intends to invest additional capital in the portfolio to position it for further growth.

The last hotel portfolio the company acquired was a little more than a year ago. In May 2006 JER acquired Jameson Inns Inc. for $371 million or $2.97 per share. With this sale, JER added 107 proprietary-branded hotel properties in 12 southeastern and Midwestern states, including such brands as the Jameson Inn and Signature Inn names.

Also in the news, the joint venture between Formation Capital and JER has completed its acquisition of Genesis Healthcare Corp. with an offer of $63 a share for the Genesis stock.