PHILADELPHIA--(BUSINESS WIRE)--Hersha Hospitality Trust (NYSE: HT) (“Hersha” or the “Company”), owner of upscale hotels in urban gateway markets, today announced that its Board of Trustees has approved a reverse share split of its issued and outstanding common shares and common units of limited partnership interest and LTIP units (“Common Shares”) at a ratio of 1-for-4. The reverse share split is expected to take effect at approximately 5:00 p.m., EDT, on June 22, 2015 (the “Effective Time”).
Accordingly, at the Effective Time, every four issued and outstanding Common Shares will be converted into one Common Share. In addition, at the market open on June 23, 2015 (the trading day immediately after the date of the Effective Time), the Common Shares will begin trading on the New York Stock Exchange on a post-split basis under the existing symbol “HT” and will be assigned a new CUSIP number: 427825 500.
“Hersha’s 1-for-4 reverse share split, implying an annualized dividend of $1.12, will allow Hersha to target a broader group of domestic and international institutional investors and brings our stock price in-line with our lodging REIT peers, the majority of which came to market at prices between $17-to-$22 per share at the time of their IPO. The reverse share split also affords our institutional investors reduced trading costs and results in reduced administrative costs for the Company”, stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer. “In addition, we have and will continue to employ various value creation levers such as our aggressive asset management and revenue management strategies along with opportunistic stock buybacks to enhance our total returns. To date in 2015, we have repurchased approximately 6.6 million shares totaling $42.4 million(1) as the Company continues to see a large variance between the current trading price and the Company’s net asset value.”
As a result of the reverse share split, the number of outstanding Common Shares will be reduced from approximately 201.6 million to approximately 50.4 million. Upon completion of the reverse share split, the Company’s previously announced second quarter dividend to be paid on July 15, 2015 to the holders of record of Common Shares on the close of business on June 30, 2015, will be adjusted to $0.28 per Common Share (reflecting four times the previously announced second quarter dividend of $0.07 per Common Share to reflect the reverse share split). The amount of any future dividends payable by the Company will be determined by and at the sole discretion of the Company’s Board of Trustees.
No fractional shares will be issued in connection with the reverse share split. Instead, each shareholder that would otherwise be entitled to receive a fractional share will instead be entitled to receive, in lieu of such fractional share, cash in an amount equal to the relevant percentage of the product of a fraction of a share, multiplied by the closing price of a Common Share, on a split-adjusted basis, as reported by the New York Stock Exchange on June 22, 2015. The reverse share split will apply to all of the Company’s outstanding Common Shares and therefore will not affect any shareholder’s relative ownership percentage (except for de minimis changes as a result of the elimination of fractional shares). Shareholders of record will be receiving information from American Stock Transfer & Trust Company, LLC, the Company’s transfer agent and the exchange agent for the reverse share split, regarding their shareholdings following the reverse share split and cash payments for any fractional interest. Shareholders who hold their shares in brokerage accounts or “street name” are not required to take any action to effect the exchange of their shares.
(1) Share buy-back activity as of 5/29/2015
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale hotels in urban gateway markets. The Company's 51 hotels totaling 8,259 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast and South Florida. The Company's shares are traded on The New York Stock Exchange under the ticker “HT”.
Forward Looking Statement
This press release contains forward-looking information based upon the Company’s current best judgment and expectations. Actual results could vary from those presented herein. The risks and uncertainties associated with forward-looking information in this release include, but are not limited to, factors that are beyond the Company’s control, including the effect the proposed reverse share split will have on the trading price of the Company’s common shares, the reduction, if any, in administrative costs the Company will experience as a result of the proposed reverse share split, and the factors listed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, please refer to the Company’s filings with the Securities and Exchange Commission.