Denver-based RLH Corporation (NYSE: RLH), parent company of Red Lion hotels, is to be acquired by Boston-based Sonesta International Hotels Corporation (“Sonesta”), in an all-cash transaction valued at approximately $90 million.
“We are excited about unlocking shareholder value through this all-cash transaction with Sonesta,” said R. Carter Pate, Chairman of RLH. “After conducting a thorough review of strategic alternatives, the Board believes [the] announcement is in the best interest of all of Red Lion’s shareholders.”
Under the terms of the merger agreement, holders of RLH’s common stock will receive $3.50 per share in cash. This represents an 88 percent premium over the November 4, 2020 closing share price, the last trading date before Red Lion most recently provided an update on its strategic alternatives, and a 30 percent premium over today’s closing price prior to the transaction being announced.
The transaction, which is currently expected to close in the first half of 2021, is subject to customary closing conditions, including the approval of RLH’s shareholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by Sonesta. Upon completion of the transaction, RLH will become a privately-held company, and its common stock will no longer be listed on the NYSE.
RLH Corporation is focused on the franchising of eight brands – Hotel RL, Red Lion Hotels, Red Lion Inn & Suites, Signature Inn, GuestHouse Extended Stay, Americas Best Value Inn, Canadas Best Value Inn and Knights Inn. RLH maximizes return on invested capital for hotel owners across North America through relevant brands, industry-leading technology, and forward-thinking services.
In early December, Sonnesta announced that it had added 102 properties to its portfolio — including the former Crowne Plaza Denver, now rebranded as Sonesta Denver Downtown.