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Pebblebrook Hotel Trust Sweetens Offer For LaSalle Hotel Properties

Pebblebrook Hotel Trust (PEB) released an offer letter dated June 11, 2018 to the Board of Trustees of LaSalle Hotel Properties (LHO), in which Pebblebrook submitted a revised merger proposal for a strategic combination with LaSalle. This offer was unanimously approved by Pebblebrook's Board of Trustees.

Pebblebrook noted the offer for 100 percent of LaSalle's outstanding common shares represents an implied price of $37.80 per LaSalle common share, based on a fixed exchange ratio of 0.92 Pebblebrook common share for each LaSalle common share.

The offer provides a 13 percent premium over the $33.50 per share price in LaSalle's agreement with Blackstone. Pebblebrook noted that its offer takes into account the $112 million cost of the termination fee LaSalle has agreed to pay to Blackstone.

Pebblebrook's offer provides LaSalle's common shareholders with the option for each share to elect to receive $37.80 per share in cash, instead of Pebblebrook shares, subject to a cap of 20 percent of LaSalle shares receiving cash and customary pro ration if the number of LaSalle holders electing to receive cash instead of stock is oversubscribed.

Jon Bortz, Chairman, President and CEO of Pebblebrook Hotel Trust, said, "The performance of both LaSalle's and Pebblebrook's shares since LaSalle's May 21st announcement of its sale agreement with Blackstone at $33.50 per share is evidence that the investment community and both LaSalle's and Pebblebrook's shareholders wholeheartedly agree with us."

"In fact, we are not aware of any listed equity REIT M&A transactions since 2006 in which a target has agreed to a cash offer at a discount of greater than 1% compared to a competing share or share/cash offer," Bortz added.

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