By Lisa Kerner
Charlotte, N.C., April 16 - Innkeepers USA Trust entered into a definitive agreement to be acquired by an affiliate of Apollo Investment Corp. for $17.75 per share in cash, plus the assumption of debt.
As a result, Innkeepers will pay its first-quarter common share dividend on April 24 and will suspend any further common share dividends.
The $1.5 billion transaction, subject to Innkeepers common shareholder approval, is slated to close in the second quarter of 2007 and is not contingent upon financing.
Termination of the agreement due to a superior proposal requires payment of a $17 million fee.
The agreement also called for a termination fee of $25 million if the agreement is terminated due to lack of financing and up to a $50 million fee for intentional breach of contract.
"We believe this is a compelling all-cash transaction that provides substantial value for Innkeepers' shareholders," Innkeepers chief executive officer and president Jeffrey H. Fisher said in a company news release.
Innkeepers USA Trust is a Palm Beach, Fla.-based hotel real estate investment trust and owner of upscale extended-stay hotel properties, including Residence Inns, Summerfield Suites and Hampton Inns.
Apollo Investment is a closed-end investment company located in New York.
| Acquirer: | Apollo Investment Corp.
|
| Target: | Innkeepers USA Trust
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| Transaction total: | $1.5 billion
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| Payment per share: | $17.75
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| Termination fee: | $17 million to $50 million
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| Announcement date: | April 16
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| Expected closing: | Second quarter of 2007
|
| Stock price for target: | NYSE: KPA; $16.45 on April 13
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