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Ashford to purchase Remington unit for $275 million of new convertible preferred shares
By Rebecca Melvin
New York, June 3 – Ashford Inc. has inked an agreement to purchase Remington Holdings LP’s hotel management business for $275 million of series D convertible preferred stock, according to a company news release.
The asset manager also plans to exchange $203 million of Remington-held series B convertible preferred stock into $203 million of the series D convertibles for a total deal size of series D convertible preferred stock of $478 million.
The sellers received $203 million of series B convertible preferreds in a previous transaction.
The new preferreds will be convertible into Ashford common shares at $117.50 per share, which is a 164% premium to the closing share price of Ashford on Friday.
The preferreds will yield a dividend of 6.59% in the first year, 6.99% in the second year and 7.28% in the third year and following years.
The transaction will be registered with the Securities and Exchange Commission. It is expected to close sometime in the fourth quarter and will increase Ashford’s total enterprise value to about $600 million, the company said.
Ashford is an asset manager based in Dallas. Remington is an independent hotel management company.
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