Strategic Hotels & Resorts, Inc. (BEE) said it has priced an underwritten public offering of 36 million common shares at $10.50 per share. The underwriters were granted a 30-day option to buy up to 5.4 million additional shares to cover over-allotments, if any. The net proceeds after underwriting discounts and commissions and estimated offering expenses are estimated to be around $362.4 million or about $416.8 million, provided the underwriters' over-allotment option is exercised in full.
The net proceeds from the offering would be used to fund the acquisition of the 63.6% ownership stake in the Hotel del Coronado that it does not own from its joint venture partner, to redeem all of the issued and outstanding shares of its 8.25% Series C Cumulative Redeemable Preferred Stock, and for general corporate purposes, including, without limitation, reducing its borrowings under its bank credit facility, repaying other debt and funding capital expenditures and working capital. The offering may close on June 2, 2014.
J.P. Morgan, Deutsche Bank Securities, BofA Merrill Lynch, and Wells Fargo Securities are acting as joint book-running managers for the offering. Raymond James is acting as lead manager, and BMO Capital Markets, Capital One Securities, Evercore, JMP Securities and MLV & Co. are acting as co-managers for the offering.
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