Strategic Hotels extends tender after minimum threshold missed

By Susanna Moon

Chicago, Dec. 8 - Strategic Hotels & Resorts, Inc. said it extended the tender offer for its 8¼% series C cumulative redeemable preferred stock, 8¼% series B cumulative redeemable preferred stock and 8½% series A cumulative redeemable preferred stock, listed in order of acceptance priority level.

The offer will now run until 5 p.m. ET on Dec. 12, extended from 5 p.m. ET on Dec. 7. It began on Nov. 7.

As of the close of business on Dec. 7, holders tendered 1,659,255 series C shares, 943,555 series B shares and 271,705 series A shares, for total tenders of 2,874,515 preferreds.

The offer is conditioned on tenders for at least 3,773,585 preferreds, according to a previous company press release.

Strategic Hotels is offering to purchase up to 4,716,981 of the preferreds in total. It will purchase no more than 4,716,981 of the 5.75 million outstanding series C preferreds, no more than 4.4 million of the 4.6 million outstanding series B preferreds and no more than 4,288,750 of the 4,488,750 outstanding series A preferreds.

The purchase price is $26.50 per series C or series B preferred and $26.70 per series A preferred, in each case net to the seller in cash, less any applicable withholding taxes and without accrued dividends.

If the number of preferreds tendered exceeds the total cap or the maximum number of preferreds specified for a particular series of preferreds, the tendered preferreds will be accepted based on their priority levels and may be prorated.

The company declared accrued dividends through Sept. 30 and dividends for the quarter ending Dec. 31. These dividends will be payable on June 29, 2012 to holders of record as of June 15, 2012. They are contingent on the satisfaction or waiver of all of the conditions of the tender offer and the company's ability to meet on the payment date the requirements of the Maryland General Corporation Law with respect to the payment of dividends.

The company previously said it expected to be able to meet the requirements of the Maryland General Corporation Law.

Holders whose preferreds are accepted for purchase will not be entitled to receive the unpaid dividends or any other dividends.

The joint lead dealer managers are Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527) and Bank of America Merrill Lynch (888 292-0070 or 980 683-3215). The information agent is MacKenzie Partners, Inc. (212 929-5500 or 800 322-2885). BNY Shareowner Services is the depositary.

Strategic Hotels & Resorts is a real estate investment trust based in Chicago that owns and manages high-end hotels and resorts.

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