RICHMOND, Va.--(BUSINESS WIRE)--
Apple REIT Seven, Inc. (“Apple Seven”), Apple REIT Eight, Inc. (“Apple
Eight”) and Apple REIT Nine, Inc. (“Apple Nine,” and together with Apple
Seven and Apple Eight, the “Companies,” or individually, a “Company”),
each of which is a real estate investment trust (REIT), announced today
that they have entered into a definitive merger agreement pursuant to
which Apple Seven and Apple Eight will combine with Apple Nine in two
merger transactions. The Board of Directors of each Company unanimously
approved the merger agreement based on the unanimous recommendation of
its special committee of two non-management directors that considered
the transaction.
In addition to certain customary closing conditions including the filing
of a Registration Statement on Form S-4, the merger agreement is subject
to the approval by the shareholders of each Company. The Companies will
provide additional information in a joint proxy statement/prospectus
relating to the proposed transaction. The Companies anticipate that the
joint proxy statement/prospectus will be distributed to shareholders
during the fourth quarter of 2013 and do not expect to comment further
until that time. Each merger is conditioned on the concurrent
consummation of the other merger. As a result, there can be no assurance
that the mergers will occur.
If the required shareholder approvals are received, in the mergers, each
issued and outstanding Unit (Common Share and related Series A Preferred
Share) of Apple Seven will be converted into the right to receive one
Apple Nine Common Share, and each issued and outstanding Unit of Apple
Eight will be converted into the right to receive 0.85 Apple Nine Common
Shares. The current outstanding Apple Nine Common Shares will remain
outstanding.
If the transaction is approved, Apple Nine will become self-advised and
each Company will terminate its advisory arrangements with its advisors.
Therefore, in accordance with the conversion formula set forth in the
Apple Seven, Apple Eight and Apple Nine articles of incorporation, and
pursuant to provisions of the merger agreement, each outstanding Apple
Seven, Apple Eight and Apple Nine Series B Convertible Preferred Share
will convert into Apple Nine Common Shares and all Series A Preferred
and Series B Shares of the Companies will terminate in connection with
the mergers.
Glade M. Knight, Chairman and Chief Executive Officer of each of the
Companies, said, “Today I am proud to announce the proposal to combine
Apple Seven, Apple Eight and Apple Nine. If approved by our
shareholders, the combined company will be one of the largest
hospitality REITs in the U.S. with 191 hotels with 23,711 guestrooms in
33 states. Due to the increased size and scale of the combined company,
we believe that it will be better positioned to pursue enhanced avenues
of liquidity for our shareholders through the exploration of certain
strategic alternatives such as possibly listing the combined company on
an exchange, a sale of the combined company or a merger with a third
party company and to have access to more attractive financing. I would
like to thank our teams of advisors in assisting us in developing this
merger strategy.”
McGuireWoods LLP is acting as corporate counsel to each Company in
connection with this transaction. Foley & Lardner LLP is acting as legal
advisor, and BofA Merrill Lynch is acting as financial advisor, to the
Special Committee of the Board of Directors of Apple Seven in connection
with this transaction. Kaufman & Canoles, P.C. is acting as legal
advisor, and KeyBanc Capital Markets Inc. is acting as financial
advisor, to the Special Committee of the Board of Directors of Apple
Eight in connection with this transaction. Hogan Lovells US LLP is
acting as legal advisor, and Citigroup Global Markets Inc. is acting as
financial advisor, to the Special Committee of the Board of Directors of
Apple Nine in connection with this transaction.
About Apple REIT Seven, Inc., Apple REIT Eight, Inc. and Apple REIT
Nine, Inc.:
Apple REIT Seven, Apple REIT Eight and Apple REIT Nine are REIT’s
focused on the ownership of hotels that generate attractive returns for
our shareholders. The Companies’ hotels operate under the Courtyard®
by Marriott®, Fairfield Inn® by Marriott®,
Fairfield Inn & Suites® by Marriott®,
Renaissance® Hotels, Residence Inn® by Marriott®,
SpringHill Suites® by Marriott®, TownePlace Suites®
by Marriott®, Marriott®Hotels & Resorts, Embassy
Suites Hotels®, Home2 Suites by Hilton®, Homewood
Suites by Hilton®, Hilton®, Hilton Garden Inn®,
Hampton Inn®, and Hampton Inn & Suites® brands.
The Apple REIT Seven portfolio consists of 51 hotels, containing a total
of 6,426 guestrooms in 18 states. The Apple REIT Eight portfolio
consists of 51 hotels, containing a total of 5,914 guestrooms in 19
states. The Apple REIT Nine portfolio consists of 89 hotels, containing
a total of 11,371 guestrooms in 27 states. Additional information about
the Companies can be found online at www.applereitseven.com,
www.applereiteight.com
and www.applereitnine.com.
Forward Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. These
forward-looking statements generally can be identified by use of
statements that include phrases such as “believe,” “expect,”
“anticipate,” “estimate,” “intend,” “plan,” “foresee,” “looking ahead,”
“is confident,” “should be,” “will,” “predicted,” “likely,” or other
words or phrases of similar import. Such statements involve known and
unknown risks, uncertainties, and other factors which may cause the
actual results, performance, or achievements of any Company to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors
include, but are not limited to, the ability of any Company to obtain
required shareholder or other third-party approvals required to
consummate the proposed mergers; the satisfaction or waiver of other
conditions in the merger agreement; a material adverse effect on any
Company; the outcome of any legal proceedings that may be instituted
against any Company and others related to the merger agreement; the
ability of any Company to implement its operating strategy; any
Company’s ability to manage planned growth; the outcome of current and
future litigation and regulatory proceedings or inquiries; changes in
economic cycles; and competition within the hotel industry. Although
each Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore there can be no assurance
that such statements included in this press release will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such
information should not be regarded as a representation by any Company or
any other person that the results or conditions described in such
statements or the objectives and plans of any Company will be achieved.
In addition, each Company’s qualification as a real estate investment
trust involves the application of highly technical and complex
provisions of the Internal Revenue Code. Certain factors that could
cause actual results to differ materially from these forward-looking
statements are listed from time to time in each Company’s SEC reports,
including, but not limited to, in the section entitled “Item 1A. Risk
Factors” in the Annual Report on Form 10-K filed by Apple Seven with the
SEC on March 6, 2013 and the Annual Reports on Form 10-K filed by Apple
Eight and Apple Nine, respectively, with the SEC on March 7, 2013. Any
forward-looking statement speaks only as of the date of this press
release and we undertake no obligation to update or revise any
forward-looking statements, whether as a result of new developments or
otherwise.
Additional Information about the Mergers and Where
to Find It
In connection with the proposed mergers whereby Apple Nine will acquire
all of the outstanding shares of each of Apple Seven and Apple Eight,
the Companies intend to file relevant materials with the Securities and
Exchange Commission, including a registration statement on Form S-4 that
will contain a joint proxy statement/prospectus. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISIONS, INVESTORS AND SECURITY HOLDERS OF EACH
COMPANY ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ALL
OTHER MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT EACH COMPANY AND THE MERGERS. The
registration statement, the joint proxy statement/prospectus and other
materials (when they become available) containing information about the
proposed transaction, and any other documents filed by any Company with
the SEC, may be obtained free of charge at the SEC’s web site at www.sec.gov.
In addition, investors and security holders may obtain free copies of
the documents filed with the SEC by each Company by directing a written
request to Apple REIT Seven, Inc., Apple REIT Eight, Inc. or Apple REIT
Nine, Inc., respectively, at 814 East Main Street, Richmond, Virginia
23219, Attention: Investor Relations.
Each Company and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from the security holders
of that Company in connection with the mergers. Information about the
executive officers and directors of each Company and its ownership of
securities in that Company is set forth in the proxy statement for that
Company’s 2013 Annual Meeting of Shareholders, which (for each of Apple
Seven, Apple Eight and Apple Nine) was filed with the SEC on April 9,
2013. Investors and security holders may obtain additional information
regarding the direct and indirect interests of any Company and its
executive officers and directors in the mergers by reading the proxy
statement/prospectus regarding the mergers when it becomes available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20130808006252/en/
Apple REIT Seven, Inc. and Apple REIT Eight, Inc. and Apple REIT Nine,
Inc.
Kelly C. Clarke, 804-727-6321
Source: Apple REIT Seven, Inc. and Apple REIT Eight, Inc. and Apple REIT Nine, Inc.