Apple Hospitality REIT To Merge With Apple REIT Ten In $1.3 Bln Cash, Stock Deal

(RTTNews) - Apple Hospitality REIT, Inc. (APLE) and Apple REIT Ten, Inc. announced Thursday that the boards of directors of both companies have approved a definitive agreement to be merged in a cash and stock deal.

The implied transaction value is $1.3 billion and is comprised of approximately $94 million in cash, approximately 49.1 million Apple Hospitality common shares issued to Apple Ten shareholders and the extinguishment or assumption of approximately $239 million in debt.

Under the deal terms, Apple Ten's shareholders would receive $1.00 in cash per each Apple Ten "Unit" and each Unit of Apple Ten would be converted into a fixed exchange ratio of 0.522 Apple Hospitality common shares. The total per Unit consideration equates to an implied offer price of $11.17 per Apple Ten Unit, including the $1.00 cash per Unit consideration.

The transaction joins two highly complementary select service hotel portfolios with a combined asset base consisting of 234 hotels with 30,017 guestrooms geographically diversified across 94 MSAs throughout 33 states.

The Pro Forma Combined Company will have an enterprise value of approximately $5.7 billion and a total equity market capitalization of approximately $4.4 billion.

The merger is expected to result in a number of strategic and financial benefits for Apple Hospitality and Apple Ten shareholders.

Upon completion of the merger, the combined company will retain the Apple Hospitality REIT name and continue to trade under the NYSE ticker symbol APLE. Apple Hospitality's management team will continue to serve in their respective roles for the combined company.

The transaction is expected to close in the third quarter of 2016.