Industries Commercial Real Estate

Affiliate of Blackstone Real Estate Partners to buy Apple REIT Six for $1.2 billion

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Apple REIT Six Inc., a real estate investment trust based in Richmond, has entered into a definitive merger agreement to be acquired by BRE Select Hotels Corp., an affiliate of Blackstone Real Estate Partners VII, in a deal valued at $1.2 billion.

The company said in a press release that the REIT’s board unanimously agreed to the transaction with one of commercial real estate industry’s biggest players. Blackstone runs a global fund, based out of New York.
Under the terms of the agreement, the proposed deal has a value for shareholders of $11.10 a share, made up of $9.20 in cash and a share of BRE Hotels’ preferred stock, valued at $1.90 a share.

Apple REIT Six’s dividend reinvestment and share redemption programs have been suspended in connection with the execution of the merger agreement. Also, in accordance with the agreement, the company has suspended dividend payments.

The merger agreement is subject to shareholder approval and customary closing conditions. If conditions are satisfied, the merger is expected to close in the first half of 2013.
McGuireWoods LLP is acting as legal advisor to the Apple REIT Six, and Wells Fargo Securities provided financial advisory services to the company in connection with this transaction.

Apple REIT Six is focused on upscale, extended-stay and select-service hotels. The portfolio consists of 66 hotels, containing 7,658 guestrooms, in 18 states. Since the company began in 2004, it said it has paid approximately $7.29 per unit in distributions, or $589 million.

The deal does not affect other Apple REIT-affiliated companies that also own hotels. It follows in the wake of an unsolicited tender offer from MacKenzie Capital Management last year.

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