Strategic Hotels lowers minimum condition, extends preferreds offer

By Angela McDaniels

Tacoma, Wash., Dec. 13 - Strategic Hotels & Resorts, Inc. decreased the minimum tender condition and further 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, according to a company news release.

The series are listed in order of acceptance priority level.

The offer was extended to 5 p.m. ET on Dec. 19 from 5 p.m. ET on Dec. 12. It is now conditioned on the receipt of tenders for at least 3,237,752 preferreds.

The new minimum is equal to the number of preferreds tendered as of the close of business on Dec. 12. That includes 1,761,428 series C preferreds, 1,047,435 series B preferreds and 428,889 series A preferreds.

When the offer began on Nov. 7, it was conditioned on the company receiving tenders for at least 3,773,585 preferreds. The company had not met this condition as of the original deadline, 5 p.m. ET on Dec. 7, and consequently extended the deadline to Dec. 12.

The company said it does not plan to amend the revised minimum tender condition or further extend the offers. If the conditions to the offers, including the revised minimum tender condition, are not met, the offers will be terminated and the company's contingent dividend declaration for the preferreds will no longer be valid.

As previously reported, the company 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 has 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 expects 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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