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Sunstone Hotel Investors' Dutch auction tender offer oversubscribed
By Lisa Kerner
Charlotte, N.C., June 30 - Sunstone Hotel Investors, Inc. expects to purchase 7.4 million shares of its common stock based on preliminary results of its modified Dutch auction tender offer ended June 27.
The total shares being purchased include 6.2 million shares initially offered to be purchased by the company and an additional 1.2 million shares, the maximum increase permitted without extending the offer, a Sunstone news release said.
According to Sunstone, the shares are being purchased at a price of $17.50 each for a total of approximately $129 million, excluding fees and costs.
The offer is oversubscribed and as a result, Sunstone expects to only accept for purchase, on a pro rata basis, approximately 93.8% of the shares validly tendered at or below $17.50 per share. Sunstone noted that the proration factor is preliminary and subject to change.
The company said it expects to purchase approximately 13% of its common stock outstanding as of May 30 and to have about 51.3 million shares outstanding following payment for the shares purchased in the offer.
On June 16, Sunstone amended the price range of its offer to purchase up to 6.2 million shares of its common stock to a price not less than $16.75 and not greater than $19.25 per share due to recent softness in lodging stocks.
The prior offer for the same amount of shares was not less than $18.65 and not greater than $21.15 per share, it was previously reported.
D.F. King & Co., Inc. (800 735- 3107) was information agent for the offer, and J.P. Morgan Securities Inc. was the dealer manager. The depositary was American Stock Transfer & Trust Co.
Sunstone Hotel Investors is a lodging real estate investment trust based in San Clemente, Calif.
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