Lodgian continues strategic review process; market conditions impact possible sale of company

By Lisa Kerner

Charlotte, N.C., Dec. 27 - Lodgian, Inc. said the current volatility in the debt and credit markets may "inhibit or delay the signing or consummation of a transaction to sell the company."

As a result, Lodgian has suspended discussion with interested parties and will continue to review strategic alternatives to maximize shareholder value, a company news release stated.

Lodgian announced plans to review strategic alternatives on Jan. 22, 2007.

The company's board of directors believes, as a result of the review process, that Lodgian's shares are undervalued and represent "an attractive opportunity" for investment of the company's available cash.

The closing price for Lodgian's shares on Dec. 27 was $11.75 per share.

Lodgian has continued its previously announced sale of certain assets. Since Nov. 1, 2006, the company has sold 24 hotels for gross proceeds of $92 million, with plans to sell another nine properties.

"The sale of these non-strategic properties will allow us to concentrate operationally on those hotels that will generate the highest returns and produce long-term growth for the company," Lodgian president and chief executive officer Ed Rohling said in the release.

"We will be increasing our operational focus on our upscale and upper upscale properties, which will comprise approximately 66% of the remaining rooms," Rohling added.

The company has also repurchased a total of 1.6 million shares of its common stock at an average cost of $11.83 each. Lodgian expects to continue the share repurchase as it explores alternatives.

It was previously reported that Lodgian has pursued cost-reduction initiatives, including downsizing corporate office staff and consolidating five operating regions into two regions, for savings of some $4 million to $4.5 million annually.

Atlanta-based Lodgian is an independent owner/operator of full-service hotels in the United States.

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