Watermark Lodging Trust Inc said last Friday that it had entered into a definitive agreement with private real estate funds managed by Brookfield, under which Brookfield will purchase all of the outstanding shares of common stock of Watermark for $6.768 per Class A share and $6.699 per Class T share.
The total value of the all-cash transaction is estimated at $3.8 billion, including the assumption of debt and preferred equity.
Watermark’s Board of Directors has unanimously approved the proposed transaction, which is expected to be finalized during the fourth quarter of this year.
The Watermark portfolio includes high-quality lodging assets consisting of 25 properties with a total of over 8,100 rooms. Those luxury and upper upscale assets are located in drive-to leisure destinations and gateway urban cities across 14 states.
“We are very pleased to reach this agreement with Brookfield, as it achieves our longer-term objective of a liquidity event, while providing our stockholders with an immediate and certain cash value,” Michael Medzigian, Chairman and Chief Executive Officer of Watermark, said in a press release.
“The transaction’s premium to our most recently published Net Asset Values per share represents the strong execution of our entire team who have demonstrated the ability to find innovative solutions to address the challenges brought on by the COVID-19 pandemic. I would like to thank the members of our Watermark team, across all functions, for their dedication and hard work over the past several years,” the CEO added.
Morgan Stanley & Co. LLC was the exclusive financial advisor to Watermark, Hodges Ward Elliott served as real estate advisor, while Clifford Chance US LLP and Paul Hastings LLP acted as legal counsel.
Meanwhile, Fried Frank Harris Shriver & Jacobson LLP acted as legal counsel to Brookfield Asset Management, while Citigroup, Bank of America, JP Morgan and Wells Fargo served as financial advisors.