Hersha Hospitality plans $1.05 billion debt financing for buyout

By Sara Rosenberg

New York, Aug. 28 – Hersha Hospitality Trust has received a commitment for up to $1.05 billion of debt financing to help fund its acquisition by KSL Capital Partners LLC, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Wells Fargo Bank and Citigroup Global Markets Inc. provided the debt commitment.

Other funds for the transaction will come from $400 million of equity.

Under the agreement, Hersha Hospitality is being bought for $10.00 per share in an all-cash transaction valued at about $1.4 billion. Holders of the company’s 6 7/8% series C cumulative redeemable preferred shares, 6˝% series D cumulative redeemable preferred shares and 6˝% series E cumulative redeemable preferred shares will receive $25.00 in cash, plus any accrued and unpaid dividends to which they are entitled, for each preferred share they own.

Closing is expected in the fourth quarter, subject to customary conditions, including shareholder approval/

Hersha Hospitality is a Harrisburg, Pa.-based self-advised real estate investment trust that owns luxury and lifestyle hotels in coastal gateway and resort markets.

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