A joint venture between affiliates of Highgate and Cerberus Capital Management has agreed to acquire CorePoint Lodging Inc., a publicly traded U.S. lodging REIT.
Under the terms of the merger agreement, Highgate and Cerberus will acquire all outstanding shares of CorePoint common stock in an all-cash transaction valued at approximately $1.5 billion based on the $15.65 per share consideration, according to a statement by the company.
CorePoint said this price represents a premium of approximately 42% to CorePoint’s closing share price on July 13, 2021, the last trading day prior to the company’s public announcement of its strategic alternatives process.
Keith Cline, President and Chief Executive Officer of CorePoint, said, “This transaction continues our strategy of maximizing value and represents a compelling opportunity to deliver immediate and certain cash value to our stockholders.”
Mitesh Shah, CorePoint’s Chairman of the Board, added, “The CorePoint Board, in consultation with our independent financial and legal advisors, conducted a comprehensive review of strategic alternatives and unanimously determined that this transaction maximizes value for our stockholders. The resilience and achievements of CorePoint’s entire team have unlocked substantial value through a deliberate, non-core disposition strategy, and today’s all-cash sale represents a successful culmination of these efforts.”
“Highgate has tremendous respect for CorePoint and its highly experienced team, having observed the Company strengthen, refine and cultivate a leading portfolio of select service hotels,” said Mahmood Khimji, Co-Chairman of Highgate. “We are thrilled to partner with our friends at Cerberus on another exciting transaction, through which Highgate will continue to enhance its capabilities in the select service space. We look forward to collaborating with the many associates and stakeholders involved towards a successful closing, and to working closely with the Wyndham Hotels team as we embark on the next chapter for this portfolio.”
Tom Wagner, Head of North American Real Estate at Cerberus, commented: “Since separating from La Quinta Holdings, Inc. in 2018, the CorePoint management team has done an excellent job running the business, navigating the unprecedented COVID-19 pandemic, and strategically repositioning its portfolio. Alongside Highgate, we are excited for the opportunity to build on these positive strides and establish the Company’s next chapter of growth as a private company.”
The transaction is expected to close in the first quarter of 2022, subject to the approval of CorePoint’s stockholders and the satisfaction of other customary closing conditions.